Thoughts about Retirement

by Ron Finke, JD, CHFC, CMT, CKA® 
President, Chief Investment Officer, Stewardship Capital

Recently, MSN published a story by Ana T. Sola reporting a survey by Empower, a 401k provider, that most Americans now think age 58 should be the appropriate time to retire. I would say that the 1,001 responders undoubtedly included a high percentage of younger workers.


From my own experience with clients and others is that most people in their 50’s or older say they plan to retire in their mid-60’s or older. Many admit they did not begin to save early enough in their working lives and are playing catch-up.


However, a young couple amazed me with their willingness to start in earnest to prepare well for their future. In their early 20’s, he was already well aware of the power of compounding and the tax benefits of having a Roth IRA. One of the best explanations of a Roth versus a traditional IRA comes in a question: Would you rather be taxed on the acorns of an oak tree early on or on the full giant tree in a few decades?

The next item of discussion was the Rule of 72. What? The number of years required for a dollar to double is the number produced by dividing the interest rate into 72. Thus using 9 for an assumed long term interest rate and 8 years for a doubling, any 22 year old will be shocked by seeing a $64 total in their 60’s. For each and every dollar saved in the Roth. I know of some high school students that are funding their Roth accounts from part-time jobs.

My next encounter was a young Missourian of 58 years who actually did retire from a materials company last month. How did he do it, I asked? In his 20’s, he began saving 15 percent a year and stuck with it. He worked for the same company while a college student and began to receive its match of 4 percent. It was fantastic how fast the total of 19 percent grew during 39 years.

So much for the money; but what are you going to do with an extra 40 hours a week? Those who retire successfully have a great reason—in their minds at least—to continue to live with a mind toward the future. In the last case, he has been wanting to volunteer in disaster relief efforts but work prevented that until now. Here he is in western North Carolina, helping build a new house for an older couple whose home and all their belongings floated down the river 11 months ago.

We have an opportunity to try new things, study subjects of special interest at free or reduced rates, or volunteer at an animal shelter or one of dozens of worthy charities always in need of experienced help. Some of us will need to work part-time to remain engaged socially. Others I know are helping their children with providing childcare for their grandchildren.

It certainly helps to keep your day job if you love what you do, but unfortunately many do not. That is a big part of my own reason not to retire. Plus it allows us to give more to our favorite charities than we would otherwise would be able. But retirement is not just about the money. Plan ahead to have money, but focus upon retiring to something, not just from something.