On August 24, 2015, the stock markets around the world nosedived. The S&P 500 sank by 11% from a high in May, meeting the definition of a market correction. Having fired my financial planner a year ago, I was motivated to check how my retirement savings were affected. After logging in, I used a handy retirement planning tool I had previously ignored. What I discovered surprised me: I don’t need a million dollars to retire!
How can that be true? I googled “How much do I need to retire”. After checking five sites, the consensus seemed to be that I need about two-thirds of my current income to retire. The online tool factored in inflation and realistic investment returns that declined over time as I shifted to safer investments closer to retirement. I plugged in the figures and as the gurus foretold, I only need to save 10% of my gross income for retirement.
Three years ago, I had no retirement plan. So I had over-reacted by over-saving. Now, in the midst of a market downturn, I realize I don’t need to defer living. No more dreaming about what I would do when I retire with a million dollars. I can start living my retirement dreams now–with a little money, a little time, and while I have the health. Instead of building a huge nest egg, I plan for a modest one and live a little every day. After all, in the words of the singer-songwriting couple, Andy Gullahorn and Jill Phillips, “You can’t take it with you to the other side.”
You don’t need a million dollars to live out of your sweet spot. How do millionaires live? They do whatever they like. Live better than a millionaire. Start doing what you love, now.
With some freed up funds, I am encouraging my spouse to take a sabbatical, to rest, to discover how to align her work with her gifts, passion and calling. In the end, we may end up living more–happier, fulfilling, giving lives–on less income. We plan to continue living that way in retirement.
Early in my career, I had a colleague, Link, who was the child of a millionaire. His wise words, “Some save up tons so they can fish when they retire. By then they may have the money and the time but not the health. Why not fish now?” I am living his advice. Thank you Link!
Resources:
Get the MP3 of the The Other Side here.
Get the lyrics of The Other Side here.