The concept of having retirement planning strategies certainly sounds quite pompous and corporate. But the process is very useful and, if used correctly, will help us achieve our planned retired life.
The following is my simplified definition that we can easily understand and work through:
A strategy is the process that integrates our vision, our goals and our actions into a plan.
Well-formulated retirement planning strategies help to focus and allocate our resources into a unique and viable blueprint based on our skills, health and shortcomings as well as anticipated changes in the economy and environment.
Our retirement strategy is our blueprint of where we want to be and how we are going to get there. It will give us a path to follow.
We all know that there will be deviations from the plan but the key to success is to keep focusing our attention on the ultimate goal. If we keep our eye on where we want to get to, we will get there although we may have to follow a different path.
We all go through this planning process many times in our life but generally this is very specific and short term. For example "plan to buy a house", "plan an overseas holiday" or "plan a birthday party".
Unfortunately most people never take the time to set meaningful goals or make plans so end up like Alice:
"Would you tell me which way I ought to go from here?" asked Alice.
"That depends a good deal on where you want to get," said the Cat.
"I really don't care where" replied Alice.
"Then it doesn't much matter which way you go," said the Cat.
~ Lewis Carroll, Alice's Adventures in Wonderland
The development of our own retirement planning strategies will follow a set of steps.
But before we start lets agree on the meaning of some of the words we'll use in our retirement planning process so we are not confused by semantics. For us;
- Our vision is the retirement life we dream about. It is not very specific and it doesn't say how we'll get there
- Our goals will be the specific things that we will have to achieve to make our vision a reality and will be divided into short, medium and long term. They are specific targets detailed in terms of time and quantity. For example retire at age 60 with a dividend income of $5 000 per month.
- Our retirement planner will then set out the specific actions and sequence of actions we must take to achieve our goals
- Finally our retirement planning strategies will tie all the pieces together.
So start preparing your retirement strategy with your own retirement vision. Where would you like your life to go? What would be a perfect retirement for you?
There may be many things in your "bucket list" (or in your wife's "to do" jar!), you may want to travel, take up a hobby or sport or give back to society.
Dream big when setting your vision – understand that if you aim for the moon you'll never reach the stars.
All types of businesses and personal lives require some sort of strategy in order to be successful; otherwise their efforts and resources will be spent haphazardly and likely wasted.
You and I too need to develop strategies in order to effectively use our limited resources to meet the challenges we will face. We need our retirement strategy to compete against the world.
Without one we are just going to drift aimlessly into retirement.
Never forget the wise words of the American columnist, lecturer and humanitarian Eleanor Roosevelt who said "It takes as much energy to wish as it does to plan."