Rewire Your Idea of Retirement:The Wealthy Person’s Definition 💰💰
Rewire Your Idea of Retirement:
The Wealthy Person’s Definition 💰💰
What does retirement mean to you?
For many people, retirement is a time to stop working.
Hopefully, they have saved enough money to live off.
Hopefully, social security will cover their bills and they can live without worries.
Hopefully, they can travel with their spouse, enjoy hobbies that were put on hold for years or spend time with family.
But what if retirement means a different thing to the wealthy?
We’ll explore that more in a bit.
But let’s be clear about the traditional idea of retirement.
If you’re like most people, retirement means a few things:
- saving enough money to live off in retirement age
- putting enough away in an IRA / 401K
- working until you reach the “legal full retirement age”
- meeting requirement to get nursing home / medical benefits
- getting (and keeping) Social Security benefits
These are all good — and come in handy for many Americans in their later years.
But these present massive problems for most.
The issue with saving enough money to live off in retirement age
So many people are reaching the traditional retirement age of 65, only to find that they don’t have enough saved up for their needs.
This happens because:
- it was never a goal (or priority) in life and did not make it onto the list of priorities on your “to do”
- most don’t make enough to live on
- they are living with debt and have no savings account outside of a 401K or IRA (or even retirement accounts)
- even if they save enough, it was at interest rates that didn’t keep up with inflation
Think about it for yourself. Are you able to save 10% of all that you make?
20%?
How much do you save monthly?
95% of Americans save less than 1% of their earnings.
Are you part of the 5% that save 10% or more or the 5% who have no true savings at all?
More importantly — those that do save money, still don’t accrue enough to live off of at retirement.
Their savings grow at interest rates that didn’t keep up with inflation.
By the time they reach retirement age, they will not have enough to retire on.
No matter what the wealth of a person is, it can’t change the fact that retirement savings are still an issue for most people.
It’s no wonder that wealth is a scary word for many.
It typically means you’re out of touch with the reality most Americans are living in.
One where they have to struggle just to get by each month, let alone think about saving enough money or investing wisely for a retirement they can live off.
The trap with putting enough away in an IRA / 401K
The wealthy know that retirement is a marathon, not a sprint. They don’t rely on just an IRA or 401K to provide them with enough money in the future to live comfortably.
But the rest of the world does.
According to an Employee Benefit Research Institute study, only 30% of American workers were satisfied with their retirement planning.
That’s only 3 out of 10.
This satisfactory rate decreases to 2 out of 10 when surveying those who have actually retired.
How can you ensure that your wealth is set for the future?
Start by learning about these helpful tips and tricks — tricks we’ll explain later on.
The problem with working until you reach the “legal full retirement age”
Working until retirement means many people are not able to retire before they die.
Only 40% of people live to the age of 66.
Full retirement age is typically around 67, which means that if you work until your retire at a legal full retirement age, and then die not long after retiring, you never had time to enjoy anything from being retired.
It’s not a win in either scenario.
Ever wondered how people retire at 30 years of age? 45 years of age?
It’s possible, but not by working your entire life.
People who think wealth is bad for their health can’t live a good retirement lifestyle if they don’t have wealth to start with.
The downfall of meeting requirement to get nursing home / medical benefits
What about those final years when you can’t care for yourself?
Many people think that they are going to be able to retire on a $100,000 pension and live with their wealth until the end of their days.
But most pensions cannot sustain an individual for more than 15 years outside of work.
This is because the average lifespan has increased significantly over time.
And as a result, these retired individuals have to depend on government programs to subsidize the medical costs they can’t cover themselves.
So not only do most run the risk of running out of money before the final years of life when assistance is needed, this idea of retirement creates a huge and unsustainable burden on younger taxpayers that are already struggling with their own financial issues.
A vicious cycle ensues.
The wealthiest of people know this, which is why many of them focus so heavily on their better definition of retirement.
The trap of getting (and keeping) Social Security benefits
Personally, I know many retirees who still work part-time jobs after retirement to cover their expenses.
They have a hard time getting by on their Social Security and retirement savings, so they supplement it with income from an additional job.
Isn’t this the opposite of what retirement is supposed to be?
And they have to be careful not to make too much additional money, or they’ll lose the social security benefits altogether.
This is the trap of getting (and keeping) Social Security benefits.
Social security benefits don’t cover enough of your expenses but keep you trapped in so you can’t make more than enough.
Even worst, if you can’t work anymore after retirement age because of disability or illness then your only option is to get benefits through social security and special programs for low-income seniors.
The process for getting these additional benefits is mind-numbing and the waiting lists are extensive.
The wealthy’s definition of Retirement
But, retirement is an entirely new ball game for the wealthy.
Instead of living off their savings or a fixed income, wealthy individuals look to passive investments (like stocks) that earn them money while they sleep.
They have made enough during their career so they don’t need any more from the government.
They don’t need to retire from their career and take on part-time jobs as Walmart greeters.
The wealthy define retirement like this:
Retirement: A financial state where a person no longer has to work to cover their living expenses.
It’s that simple — not all the other stuff mentioned at the beginning.
You are retired when you have passive income that pays you more than what it costs to live off of each month or year.
This can be accomplished by:
- starting your own business or
- investing in stocks,
- bonds,
- real estate and/or
- creating their own assets in the form of intellectual property
— these things continue generating income regardless of if you work or not.
These things will continue generating income for you long after you’re gone.
It allows the wealthy to invest in assets that don’t depend on physical work, like stocks or startups that can grow with minimal effort.
You don’t have to save enough money to live off at retirement age
Let’s say a person saves up $2 million by the time they’re 67.
Those $2 million dollars, after taxes only generate an extra $30,000 per year.
$30,000 is not enough to live off of unless they’re living in a state like Hawaii or Florida where prices are much lower.
Most are forced to actually live off the $2 Million rather than the dividends generated from the $2 Million.
The wealthy focuses not on saving for retirement but saving to acquire the next asset.
This doesn’t require saving for 67 years.
You can acquire a passive income-generating asset in 2 years or less.
Then you repeat the cycle, saving up money and acquiring another passive income-generating asset, saving up even more money and buying the next passive income-generating asset.
Each asset actually creates more money for you to save for the next asset.
This way, you can acquire the next asset even sooner than the previous.
Or you can purchase larger assets to generate more income.
Eventually what you have is not just wealth but an entire conglomerate of assets that generate cash flow for generations.
You don’t need to dump money into an IRA / 401K
You can still retire without an IRA or 401K if you have your own business and at least one other source of income, like a rental property.
And with the investment strategy listed above, you can retire with wealth and still have enough cash to live off of each year.
Avoid working until you reach the “legal full retirement age”
The best part is, with this definition of retirement you don’t have to wait until you’re 66 to retire.
You can retire at any age!
It’s not about how many years you’ve been working, it’s all about generating wealth and passive income that covers your living expenses.
This is how you can retire early and still be rich.
The wealth definition of retirement is not about waiting until you turn 66 to stop working, it’s all about developing wealth so that passive income covers your expenses every year.
That way anyone can retire at any age on their terms — even if they’re young!
But most importantly, it provides flexibility — which means freedom from time constraints.
The other definition of retirement is just a trap in society — “you’ll end up working until you die.”
Which definition of retirement do you want to pursue?
Here’s a recap of this story:
Peace and Love