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I am all about backup plans.. I usually do that at work now and working on plan B for my retirement. I have the main idea figured out but the details are not in place yet.. thinking .. thinking .. thinking
I say the main keys are no debt and living well within your means. A bad plan is pushing the edge of your income believing all will stay the same and you can handle it. One bad burp and you are screwed.
I think being debt-free is the key, especially as one ages. For instance, if you have a paid off home and no other debt, you have to bring in much less income to make ends meet than someone with just a house and car payment. It is much easier to deal with life's challenges if you only have to make $1000/month to get by, rather than say $3000/month.
If you have little to no debt, you can be far more flexible than someone who needs a lot of income just to service their debt. If you get sick and have to reduce your working hours, you can and still not sink. If you get laid off, it's much easier to survive on unemployment or low pay if you don't need much income. If you are debt free, you could possibly go back to working part-time or doing something you've always wanted to do that is low paying, whereas the indebted person is stuck doing what they have to do.
There are some things that would wreck the best thought-out retirement plans. Imagine if you had a serious car wreck and became a quadriplegic. There's nothing you can do about that financially. You may be the picture of health and come down with serious cancer that requires phenomenally expensive care. We don't think about this much here in America, but wars and political instability can destroy lives very quickly. There are probably in Iraq, Syria, etc, that had things thought through, but the recent wars have destroyed it all.
All you can do is the best you can and you really can't worry about things you have no control over.
of course financial planning is important and finances can be a wild card, but when i saw this topic, what immediately came to mind was health and loss of a spouse/partner.
though adequate resources can provide you with options as far as health issues, any major acute or chronic illness has immeasurable impact on your life and your retirement plans. as far as losing a partner, it seems, from some previous posts in another topic, that many seniors are hoping, planning on having a spouse help and support them as they age. that's wonderful if they remain healthy and survive. but if that is lost, becoming a single person usually calls for a major re-invention of your life. i feel that becomes much harder as we age, and the plans we once had may not be possible, or even desirable, without the partner. for me, that is the ultimate wild card.
however each of us has specific areas of vulnerability, and a drastic change in any of these areas can derail retirement planning.
I'm focusing on Plan A to include being financially secure and having good health insurance at a reasonable cost in retirement through my employer. Since I'm an analytical type, I tend to obsess about the entire process. Plan A has subplans - retiring in 2 years or retiring in 4 years but working part-time the last 2 of the 4 years. This depends on how well my 401K does, will my employer allow part-time, how much is it going to cost to fix up my house, will there be some expensive surprises as I fix up my house, any health issues, etc. However Plan A also involves moving to a state where housing prices increased significantly in 2013. I'm concerned that I could be priced out of the housing market if this continues or I might not be able to buy in the area of town that I want or may not be able to afford to snowbird in the winter. So I just continue to work and save my money, fix up my house, and work on improving my diet and exercise with the carrot of retirement dangling in front of me. Control the factors that I can control and try not to stress out about the ones that I cannot control but be mindful of them and ready to adapt my plan if possible.
If I have to find a different place to retire to (Plan B), that is going to throw a big monkey wrench into the whole planning process. I will have to start all over in figuring out where I want to retire and I don't want to think about it yet.
If really bad things happen healthwise or moneywise (I would call this Plan C), I can downsize my lifestyle and move near family in a less desirable but less expensive state - but this is not something that I have planned out in detail.
Fortunately I retired 28 years ago at 33 while "The Retirement planning industry" was still nascent. I have always avoided debt,insurance,taxes,cheap booze and fugly women. Any plan I might have had at that age would not have included a divorce at 40 something, 3 tax free house flips, moving overseas for 11 years, marriage to a woman 28 years my junior, child at 52 and a new born at 61. Every day is a "roll of the dice" and what makes life worth living. If I had to spend my life as a "indentured servant" to corporate greed ...... well let's just say every choice good/bad that I have made has led me to a place where I can say "life's been good so far!"
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
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Plan B to ZZ is far more likely than Plan A (from my experience)
I watched my grandparents, parents, and my in-laws lose everything AFTER retirement. They survived (I'm not sure how). All were self employed and no plan B / pension / healthcare / inheritance.
Colonel Sanders made it happen after retirement, as did Ray Kroc...
The one thing I realize is that many different things could have happened and really screwed us up. While there was a plan and we worked for it (not just wished for it), I have seen others who worked/planned well but got bitten by health, economy, family issues, etc.
Were I not an Atheist, I would say if not for the grace of god, there goes me.......LOL
Since you raised the subject, there is a back-up plan for that as well. His name is Jesus Christ!
Otherwise, the one thing we can plan on is that things we did not plan for, will happen. That's where "What if?" planning comes into play. For example, "What if I am wrong about what I have 'always believed?' ... OR, what if inflation takes off and I find myself running-out of resources I planned to live-on? That's when it is time for anyone who isn't sure of the future, to start throwing old, locked-in ideas 'overboard' and plan for "What If's?" such as health, economy, family issues ... OR God.
For me the key is continuing to be willing to accept change. It's the one thing I know for sure I will always face.
Hope that as long as I live I'll maintain my sense of flexibility. Because for me attitude matters more than situation.
That is how I feel about it too.
My husband heard this one saying about work that has stayed with him over the years: "You are only as good as today; yesterday is gone and tomorrow hasn't happened." It's how he's stayed humble and flexible at work and it's how we both think about retirement too. Planning for the known is all we can do.
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