Here’s a question to ask yourself during your next daydream: “What if I retired today?” Many of us spend years thinking about and planning for our retirement, but that question – “What if I retired today?” – can really help bring things into sharper focus. If I retired today, would I be financially and emotionally prepared?
Sometimes it takes a familiar question asked in a different way to really get us thinking. For those not yet retired, the answer to the “when will I retire” question can remain vague and uncertain, allowing us to keep some of the troublesome issues at arm’s length. But in this Kiplinger article we’ve featured before, Tennessee-based financial writer Phil Wright asks the question in a far more direct way that forces us to stop and think. What if today was the day?
In his article, Wright lists some essential areas he suggests we need to consider when we evaluate our response to the question, “What if I retired today?” Considering his financial background, it’s hardly surprising that finances dominate his thinking. Still, like most of the articles like this that we read, Wright has some good ideas, although in our view they’re incomplete. Let’s take a look.
A Harrowing Hike Illustrates Lack of Preparedness
Wright begins his Kiplinger article with a harrowing but illuminating story about a challenging hike he took through the Great Smoky Mountains. When he realized halfway through that he was in over his head, he started to panic. “Underprepared and overwhelmed, I felt done,” he writes. “Whether pushing ahead or turning back, I had 7 miles to travel. Just as I was questioning my life choices, my son suggested we call the park ranger station or even 911. “
The suggestion made Wright pause and really consider where he was at. “Wow. What would that look like?” he thought. “Was I really in that bad of shape?”
But that simple question – “What would that look like?” – clarified the level of difficulty for him. He didn’t need a rescue helicopter. He just needed to keep going. “Six hours later, legs battered, ego bruised, I finished the hike in the dark,” he writes.
If I Retired Today, Would Self-Doubt Cloud My Decisions?
He concludes the story with the moral that will lead us through the rest of his article: “We all face moments of self-doubt and indecision. Sometimes we reset and sometimes we retreat. It’s the same on the road to retirement — some of us feel stuck and others are striving.”
Wright continues, “If you’re rethinking your next planning move, don’t panic! Instead, ponder: If I retired today, what would that look like?” In thinking the issue through, Wright breaks it down into three components, so let’s consider each one.
If I Retired Today, What Would My Cost-of-Living Be?
Wright admits that the answer to this question may be elusive. When his article first appeared back in 2022, inflation rates stood at or hear recent highs. They’ve eased since then but the U.S. economy remains turbulent, especially with an election imminent. So, is there an “ideal time” to retire? Not exactly, he acknowledges.
Nevertheless, Wright urges those planning for retirement to consider the reality of their future living costs and to plan accordingly. He writes, “Whatever direction inflation goes from here, it’s having an impact on us all, and in some ways. What are we seeing? Higher energy prices — including a recent record high for gas — and cost increases for a broad range of other items, such as groceries, travel and shelter.” (Again, his original article is a few years old, but prices do remain stubbornly high.)
Even “Modest” Inflation Has a Severe Impact
He adds, “What does this mean for retirement? An inflation rate of just 4 percent will cause the cost of everyday items to double during the course of the average 18-year retirement. At an 8 percent inflation rate, everyday costs could double in nine years.” Those are sobering numbers.
In an odd way, for those on Social Security, inflation has an upside. In 2023, the Social Security Administration raised benefits by 8.7 percent, the largest cost-of-living increase in decades. It was considerably lower for 2024, and the 2025 COLA increase is now set at just 2.5 percent. As cost of living goes up, Social Security – at least to some degree – follows suit.
We have a companion article on the Blog this week discussing the Social Security COLA for next year and what it means to the average beneficiary.
If I Retired Today, What Would My Nest Egg Look Like?
“If you take a peek at your 401(k) balance in this volatile market environment, the picture can change frequently,” Wright warns in his Kiplinger article. “However, if you do look, try not to touch because your portfolio can be like a bar of soap — the more you handle it, the smaller it might become.”
Many savers choose to use some of the many digital tools and calculators available to help them track investments and move forward toward their goals. But we think the best tool to gauge your saving, spending and investing is a financial dashboard, which you’ve heard Rajiv describe many times.
The Best Tool is a Financial Dashboard
“You wouldn’t drive a car or fly an airplane without a good set of gauges,” Rajiv suggests. “A financial dashboard is an essential tool to help you look ahead and make smart decisions today so you end up in a safe and secure place a year from now, or a decade from now, or thirty years from now. Otherwise, you’re wandering in the dark, in danger of making some really poor financial choices that can destroy your retirement dreams. I’ve seen it too many times.”
Rajiv goes on to explain how a financial dashboard allows you and your adviser to run a wide variety of “what if” scenarios that can guide your financial decisions. “We can refer you to an objective professional planner who will customize a financial dashboard just for your situation,” Rajiv advises. “I believe developing a financial dashboard is the single most important retirement decision you can make.”
The Right Attitude Toward Your Nest Egg
Returning to the Kiplinger article, the overall goal, according to Wright, is to have the right emotional mindset about your nest egg. In spite of their fears, Wright asserts that three-fourths of average retirees actually see their nest eggs stabilize or increase in retirement. Why? Wright believes “the fear of running out of money in retirement continues to haunt a generation of Boomers.”
In any case, living in fear is never the goal. “If you are spending retirement days worrying about your savings, rather than comfortably spending your savings to self-actualize, you are not on the right path,” he writes. Again, this is an area where a financial dashboard proves essential.
If I Retired Today, What Would My New Life Look Like?
But as our regular readers no doubt know, money isn’t the only important commodity in retirement. Time is a crucial aspect of your new routine, having an additional eight or so hours free in your day. Wright warns that many retirees have an exciting start, suddenly able to do all the things they wanted to do, when eventually the “retirement sugar rush” wears off and leaves them with the unexpected challenge of managing additional time.
Having a plan is vital for both your emotional and physical health. “If you have an intentional plan with purpose, your clock can be filled with reward rather than regret,” Wright explains. “Those who lack purpose in retirement have a significantly higher likelihood of experiencing a heart attack, stroke, Alzheimer’s disease, early mortality and other health risks associated with aging. It’s obvious that a financial plan is not a retirement plan. There’s a bigger picture in play.”
Successful Retirement Living Can’t Happen in Isolation
Social interaction is key in that bigger retirement picture. Wright quotes Vivek Murthy, U.S. Surgeon General: “Loneliness and weak social connections are associated with a reduction in lifespan similar to that caused by smoking 15 cigarettes a day and even greater than that associated with obesity.”
According to Wright, this could be why—along with the uncertain economic landscape—so many are now “unretiring” after the quick decisions many made during the pandemic. Whether they return to work full-time or part-time, they typically miss the social connections that working brought them.
Wright concludes, “Whether you push forward or turn back, reset or retreat, take a moment to talk through your retirement plan with your financial professional. That’s one decision you can’t go wrong with.”
Rajiv Nagaich – Your Retirement Planning Coach and Guide
The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, has been released and is now available to the public. Retirement: Dream or Disaster joins Rajiv’s ground-breaking DVD series and workbook, Master Your Future, as a powerful planning tool in your retirement toolbox. As a friend of AgingOptions, we know you’ll want to get your copy and spread the word.
You’ve heard Rajiv say it repeatedly: 70 percent of retirement plans will fail. If you know someone whose retirement turned into a nightmare when they were forced into a nursing home, went broke paying for care, or became a burden to their families – and you want to make sure it doesn’t happen to you – then this book is must-read.
Through stories, examples, and personal insights, Rajiv takes us along on his journey of expanding awareness about a problem that few are willing to talk about, yet it’s one that results in millions of Americans sleepwalking their way into their worst nightmares about aging. Rajiv lays bare the shortcomings of traditional retirement planning advice, exposes the biases many professionals have about what is best for older adults, and much more.
Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.
Your retirement can be the exciting and fulfilling life you’ve always wanted it to be. Start by reading and sharing Rajiv’s important message. And remember, Age On, everyone!
(originally reported at www.kiplinger.com)