To learn Biblical answers to your financial questions, you can #AskChuck @AskCrown your questions by clicking here. Questions used may be lightly edited for length or clarity.
According to the retirement calculator, I am way behind. My wife says we'll never be able to retire, and we are both suddenly fearful of what our financial future holds. What can we do?
Dear Scared Senior,
Regardless of whether you're ahead or behind according to the retirement calculators, there are a number of options that will help alleviate your fears.
The first option: maybe you shouldn't plan on retiring or at a minimum, postpone until it until past 70!
Some surveys indicate that 75% of Americans are reaching retirement age with $100,000 or less in savings. Baby boomers and seniors say their number one regret is failing to prepare adequately. Because of this, we're seeing a trend in Americans working past age 65. And, because more and more Japanese are now living beyond 90 years of age, many in the nation are calling for the official retirement age to be moved up to 75.
I recently had the privilege of interviewing two men who lead organizations that provide wise counsel for many Christians who seek retirement advice: Brad Hewitt, CEO of Thrivent Financial, and Russ Crosson, Executive Vice Chairman, EVP, and Chief Mission Officer for Ronald Blue Trust.
Both help their members wisely handle money and live generously. And, both agree that the concept of retirement in America has been skewed by marketers. They note that an unrealistic, idealized idea of retirement (what they refer to as "financial pornography") is being promoted that clearly violates God's word. They offer a number of good options to reduce your fear of retirement.
Here are a few of the highlights of our discussion.
Retirement Is a New Concept
Retirement did not exist in America until after Social Security payments began in the 1940s. Now, citizens hurry to quit work so they can "enjoy the good life." As a result, many fail to enjoy the trip and miss out on life because they've adopted a non-biblical attitude toward work.
We Are Designed to Work
A biblical perspective is one in which men and women live out the vocations to which they are called. Glorifying God and enjoying Him each day, they experience the abundant life. They are focused individuals with an attitude of thanksgiving for all He's provided and much happier than those who are focused on stopping "work" to live out extended vacations.
Repurposement, Not Retirement
So what should a Christian do when the time has come to transition out of their career? I like to recommend "repurposement" rather than retirement. Your skills and talents don't stop at age 65; in fact, you have immensely more wisdom and experience later in life that makes you a valuable asset in many ways. God will have a new mission for you if you allow yourself to be used by Him for God's kingdom.
Focus on Significance, Not "Success"
Moving from success to significance motivates people to work. Even a small income helps them look at their investments differently and reduces stress. Working with purpose keeps them active and healthy - physically, mentally, and spiritually.
Fear #1 - Retirement Calculators
Approximately 30% are afraid without reason. Others max out their 401Ks, but borrow to cover their children's braces or to buy a large home. Some reduce giving because they're afraid their money won't last. All because they haven't taken a biblical approach to their finances.
Lifestyle controls will significantly alter calculator numbers. Adjusting expenses, reducing debt and planning to work more years have a long-term benefits. For those in their 20s, 30s, and 40s, do not buy too much house, or carry much debt. Rather, fund your retirement, keep some cash in the bank, and pay off debt simultaneously.
Fear #2 - Social Security
Brad Hewitt thinks thinks a zero payback is unlikely. He believes the worst-case scenario would be a bankrupt system that pays 75-80% of benefits. For those over 50, he says don't worry about it. Those under 50 should plan for less than 100% return.
Fear #3 - Low Interest Rates
One solution is to "play banker" for your children and allow them to leverage their future inheritance. They pay you a higher percent than your savings earn for loans, like a mortgage, at a better interest rate.
Approximately 96% of American estates are passed down in families. When we prepare our wills, we must also prepare our heirs to wisely manage financial blessing. Family meetings are vital. Err on the side of less rather than more so as not to ruin your beneficiaries.
Although you can test your children with a financial gift to see how they steward it. Age of inheritance can be stipulated. Plan a charitable legacy and continue to give during your lifetime.
Solomon told us, "Wisdom is good with an inheritance, an advantage to those who see the sun. For the protection of wisdom is like the protection of money, and the advantage of knowledge is that wisdom preserves the life of him who has it." (Ecclesiastes 7:11-12)
Checklist to Prepare Wisely:
· Remember God is the owner - you're the manager.
· Pray for wisdom and discernment.
· Control spending and eliminate debt.
· Have your living expenses covered.
· Diversify income and reserves.
· Reduce investment risk due to less recovery time.
· Give generously and cheerfully.
Checklist to Have a Proper Mindset:
· Depend on God and don't worry.
· Pray and seek your next calling.
· Enjoy a new flexibility in work.
· Seek community and stay active.
· Live out God's design for you.
We don't know whether Social Security will be available for us, whether our savings and investments will provide, but we can depend on God. We must not worry about what we cannot control, but act on what we can.
David said, "I have been young, and now am old, yet I have not seen the righteous forsaken or his children begging for bread." (Psalm 37:25)
So, don't beat yourself up for not being prepared. Pray, act, and keep an eternal perspective!
If you want to learn more about retirement, and hear my entire conversation with Brad Hewitt and Russ Crosson, click here. We will send you the full audio CD's for a generous donation of any amount!