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Welcome to personal finance for
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long-term investors, where we believe
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Benjamin Franklin's advice that an
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investment in knowledge pays the best
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interest both in finances and in your
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life. Every episode teaches you personal
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finance and long-term investing in
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simple terms. Now, here's your host,
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Jesse Kramer. Hello and welcome to
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episode 106 of Personal Finance for
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Long-Term Investors. My name is Jesse
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Kramer. Today, we're going to take a
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deep dive on a cool 2023 survey called
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retirement perspectives and attitudes.
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It shines an an awesome light in the
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minds of about 1,700 people who
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participated in the study, about half of
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whom are retired and the other half are
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planning on retiring soon. And we're
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going to learn some lessons and compare
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and contrast. and I think come away what
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you know no matter what stage of your
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financial life you're in whether
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retirement is still decades in the
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future or you've been retired already
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for a number of years I still think
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there's some really interesting things
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we can learn from this study before we
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dive into it we'll do our customary
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review of the week thank you so much
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everyone for leaving ratings and reviews
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on Apple Podcast or Spotify this one's
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from Apple podcast a five-star review
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from CD Stewart who wrote in and said
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fantastic podcast I've been listening to
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Jesse for the last year or so and I
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absolutely love this podcast Jesse is
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fantastic at breaking down complex
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topics into easily digestible pieces
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along with the use of great metaphors. I
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like that he discusses the mindset and
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emotional side of finance while also
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providing practical nuts andbolts
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information that I can act on. I
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recommend this podcast to beginners and
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money nerds alike. Well, CD Stewart,
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thank you very much for the kind words.
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Drop me an email to
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[email protected] and I will get
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you set up with a super soft bestinest
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t-shirt. As I was alluding to you
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before, today we're going to dive deep
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on this retirements and perspectives
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study. About half of the people who
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responded to the study have already been
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retired and the other half are planning
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on retiring soon. Of the retirees, about
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half have been retired for two or fewer
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years. So, we're talking about retirees
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who are just dipping their toe into
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retirement for the first few months or
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for the first year. And then of the
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pre-retirees, about half of them are
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planning on retiring in the next two
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years. So in other words, there are a
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lot of people in the study who can speak
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to that final glide path into retirement
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and then what the initial touchdown and
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again up for the study 90% of the
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respondents were between ages 50 and 75.
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So again a lot of pre-retirees and a lot
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of post-retirees. The survey uncovers
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their perspectives, their preparedness,
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their expectations and their major
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concerns when it comes to retirement
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planning. Another fantastic takeaway is
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to see how these two major cohorts of
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pre and postretirees how they tend to
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either change their minds over time or
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how they thought one thing and then they
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realized retirement actually had a
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different a different way about it. You
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know, in other words, that the major
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concerns of some of the pre-retirees end
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up being different than the major
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concerns for that of the post-retirees.
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The people who are retired, the retirees
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have a benefit of been there, done that,
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while the pre-retirees can only imagine
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what the future holds in store for them.
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And that difference is vital. We're all
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naturally uncomfortable with the
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prospect of an unknown future, but it's
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so helpful to hear from such a large
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cohort of people actually living that
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future already. So, first a little bit
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about the authors themselves because
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they deserve all the credit for putting
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this study together. Fritz Gilbert, who
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some of you might recognize from episode
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62 of Personal Finance for Long-Term
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Investors. Fritz is the founder of the
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Retirement Manifesto, a personal finance
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blog dedicated to helping individuals
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achieve a fulfilling retirement. His
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writing emphasizes both the financial
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and the personal aspects of retirement
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planning. Fritz spent 30 years in
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corporate America, primarily in the
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aluminum industry before retiring at age
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55. And now postretirement, he and his
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wife moved to a cabin in the Georgia
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mountains where they enjoy community
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involvement and charity work. The other
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co-author of the study, Eric Wigel, is
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the founder of Retire with
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Possibilities, a retirement coaching
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firm aimed at helping individuals design
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their journey into retirement. He holds
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an MBA from the University of Chicago
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and has extensive experience in
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investment management. And the way I
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want to go through this particular
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podcast episode is to present a certain
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finding from the study, discuss the
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differences, if they exist, between the
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pre and the post retirees, and then add
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some of my own color based on my
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opinions or based on the clients I work
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with. the stories I've heard from them.
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So, I'm not going to cover every single
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question from the study, but instead I'm
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kind of handpicking or cherrypicking the
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ones that I found to be the most
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interesting to dive into. The first
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topic to dive into, I think, is uh the
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question that the survey asked, which
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is, how would you rate yourself in terms
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of finding the perfect home and
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environment to spend your retirement
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years? 75% of the results of the study
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were positive, 20% were neutral, and 5%
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were negative. So, in general, people
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are happy with their home choices or the
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places they choose to live, their
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environments. But that said, there was a
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big difference in how the two major
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cohorts of pre and post-retirees, how
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they responded. The pre-retirees make up
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fewer of the happy respondents and make
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up more of the negative respondents. And
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I think this makes sense. If you're
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still a few years out from retirement,
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you might be a little anxious about
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where you'll end up and if you'll like
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it there. You know, will you downsize
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your home? How stressful is that process
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going to be? The the process of moving
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and finding a new place. Are you going
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to move to where your grandkids are, to
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where your kids are, where they're
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living? Is that going to be what you
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want? And is it also going to be what
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what they want, what your kids and
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grandkids want? Are you going to
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snowbird to somewhere warmer? Can you
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afford to do that? There are all these
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questions and it's really hard to figure
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out what the ideal answers are. And it's
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hard to know for sure if you're going to
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enjoy those choices once you're actually
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in retirement. But that's the thing.
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Once you're in retirement, you have at
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least some of your answers. And if you
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don't like your answers, you have the
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time and the flexibility to move or to
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plan or to think about it and to
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ultimately do something about the fact
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that you aren't enjoying where you're
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living. So my takeaway from this is if
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you're concerned about your perfect home
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or your perfect environment where you're
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going to spend your retirement years, I
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think you can relax a little bit because
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even if your situation isn't perfect on
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day one of retirement, you will still
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have time to figure out your plan from
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there. Again, I'm going to skip around
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the survey a little bit here. And the
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next question I want to tackle is the
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question of how would you rate yourself
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in terms of continuing to work on new
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meaningful goals. Now, interestingly,
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people who were more than 2 years before
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retirement, they rated themselves the
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highest in this dimension. Conversely,
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people who have been retired for more
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than 2 years, they had the lowest
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self-ratings. And another finding from
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this study is simply that many retirees
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struggle to find a purpose and meaning,
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especially in the first couple years
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after retirement. So what can we do to
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ensure that we have purpose and meaning
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throughout our life especially in
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retirement? The big thing is to stay
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connected. Loneliness really is the
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silent killer of retirement and it's not
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just uh loneliness isn't just a
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psychological or a mental thing. It
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really has physical ramifications too on
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our physical health. So that's brings us
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actually I mean I don't want to cut this
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question off too soon this part of the
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study but it does bring me to the next
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question worth pondering in the study
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and the question was how would you rate
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yourself in terms of the closeness and
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the quality of your relationships? 25%
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of the study's respondents self-reported
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that they longed for deeper social
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connections. So, what do we do about
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this? Especially, what do we do about
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this in retirement? Well, I think of
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routine social habits. I think we need
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to make socializing part of our bakedin
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routine. I think of I have a friend here
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in Rochester who's uh despite being I
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think he's 80 or 81 right now. He's
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still sharp as attack. He's still very
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active. He plays squash four or five
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mornings a week. And you know, I'm
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usually joining in one or two mornings a
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week on the double squash court. And
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he's just extremely active, whether it's
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volunteering, networking, going out to
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breakfast for lunch with friends who
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he's trying to keep in touch with,
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physically, playing squash, going for
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walks. He's just he's always doing
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something. And it's routine, right? He
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his social interactions really are baked
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into his lifestyle routine. I think of a
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relative of mine who is very active in
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knitting and quilting groups in her
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retirement. It's one or two days a week
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and it's the same groups of people, but
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everybody gets together and they're
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sitting there knitting or quilting or
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whatever it may be and they're sharing
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stories and they're asking each other
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how they are. It's a weekly thing,
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right? It's built into the routine. I
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also think of a cafe here in Pittsver, a
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local cafe that I've, you know, will go
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to sometimes for my morning coffee
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meetings. And there's this rotating
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group of like 10 older men and you know,
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sometimes it's these seven guys are here
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one day and those eight guys are here
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the next day, but kind of get used to
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the same characters. But they're in
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there every morning or at least every
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morning that I'm there. There's always a
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group of these older men, retired men,
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getting coffee together, hanging out,
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chatting. Another a client of mine, she
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talks to me about going on these regular
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walks. You know, she tries to go on a
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walk every single day. And as much as
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she can, she tries to invite different
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people to join her on a walk. So, you
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know, sometimes it's routine where it'll
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be every Friday she walks with Nancy.
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And then, you know, Wednesdays it's
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every other Wednesday it's Lucy or Betty
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and blah blah blah. You you guys get
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what I'm saying? The whole idea is it's
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there's a routine. So maybe it's a book
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club, a church group, gardening,
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whatever. And a bonus thought here
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because it can be hard, especially if
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we're not particularly outgoing or you
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know the idea of of reaching out and
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what if they say no. And and one thought
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and this is a cool piece of advice I I
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recently heard is to don't try to find a
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best friend, right? You don't have to go
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out and try to find a best friend, but
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just try to be a friend. I think
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relationships really do blossom from
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that simple place. And I was listening
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to Vanessa Van Edwards recently who's a
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a very cool public speaker when it comes
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to kind of social interactions and
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relationship building and and a few
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different things that I personally find
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interesting. And she cited a study and
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the study was about basically why are
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likable people likable? Like what is
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that trait that makes people likable? Is
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it that they're funny? Is it that
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they're good-looking? Is it some form of
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like physical subconscious athleticism
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that we notice in them? And the number
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one thing that all likable people have
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in common is that their list of people
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who they like is long. In other words,
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right, the most likable people in our
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lives, they tend to be the people who
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they see the world and they just find
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lots of people who they like. They just,
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you know, I almost say it as they see
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humanity through rosy colored glasses.
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They see people who maybe are a little
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boring or a little quiet or a little
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plain and they're like, you know what, I
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I I like that person. There's something
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I like them. The more you like other
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people, the more those other people will
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like you back. So, my takeaway there is
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to, you know, we have to be pretty
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intentional about baking socialization
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into our routine. If we're seeking out
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new relationships or if we're trying to
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forge new friendships because maybe we
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left a lot of friendships behind when we
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retired, when you go out and meet
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someone, it's find something to
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genuinely like about them because if you
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can convince yourself that you like
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people, a lot of those people are going
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to like you back. Now, the next question
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from the study that I want to dive into
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is, "How would you rate yourself in
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terms of adhering to a healthy
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lifestyle?" 22% of the study's
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respondents had a negative answer to
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this question, but the study does point
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out that where we fall along the work to
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retirement spectrum is probably
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immaterial to the healthy lifestyle
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choices we have in our life. Lifestyle
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habits, they really are habits. They're
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sticky and they're ingrained somewhere
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into our subconscious. And there's
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probably not a huge difference between
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people who are working and people who
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are retired in terms of adhering to a
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healthy lifestyle. But it does kind of
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beget a a bigger question we need to ask
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ourselves, which is what's the point of
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retirement at all if you're not healthy
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enough to enjoy it? I've had this
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conversation through the blog, through
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the podcast, here through work with
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clients before. People who spent decades
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saving diligently, they've built their
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wealth, they've planned wisely, and now
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great, they've crossed the retirement
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finish line. Like good for them, but
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something's missing. And what's missing
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is certainly not money. They have plenty
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of money. They have plenty of time
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freedom. The thing that's missing really
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is vitality. And it's not because they
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didn't care about their health per se. I
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mean, in some cases, maybe it is. But
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it's mainly because maintaining your
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health just gets harder and harder as
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you age. It's just biology. Dr. Peter
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Aia, who some of you might have heard
00:11:41
of, the author of the book Outlive, he's
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like the go-to voice on longevity and
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aging. And he has a couple interesting
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concepts. One's called Healthspan. One's
00:11:49
called the centinarian decathlon. And
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and the idea there is it's not just
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about living longer. It's not just
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about, you know, instead of dying at 75,
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I want to die at 90. It's about living
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better for longer, right? It's about
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being strong enough and mobile enough
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and sharp enough to do the things that
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bring you joy into your 70s, into your
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80s, even into your 90s. In other words,
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retirement shouldn't be about not
00:12:10
working. It should really be about
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living. Living to the fullest. playing
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on the floor with your grandkids, hiking
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the trails that you always wanted to
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hike, dancing at your grandchildren's
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weddings, those kind of things. But what
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Dr. Aia points out is that those things
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don't happen by accident. They take
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work, hard physical work a lot of the
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times, just like saving for retirement
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took work. Dr. Aia points out that by
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the time you're 60, you're 65, you're
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already in a race against the clock.
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Your muscle mass is declining pretty
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quickly. Your balance gets worse.
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Chronic disease risk increases. So the
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time to prepare isn't really when you
00:12:42
retire. It is the kind of thing where
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this you got to start preparing today.
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I'm not a doctor, right? This is not
00:12:47
medical advice. I'm certainly not here
00:12:49
to hand out your workout plan or go to
00:12:50
tell you to uh drink some kale smoothies
00:12:52
or whatever that is. But I will say
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this, I've never heard a retiree or an
00:12:56
older person say that they regret taking
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care of their body. Retirement is a a
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season of life that's supposed to be
00:13:02
full of joy and purpose and connection,
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but without your health, it's almost
00:13:05
like you've been given this front row
00:13:07
seat to the concert of your dreams and
00:13:09
you forget your hearing aids. And
00:13:10
actually, I don't know. I don't know how
00:13:12
hearing fits into this, but that that's
00:13:13
a separate conversation. The whole point
00:13:15
is to take care of yourself now so that
00:13:17
your future self can live life to the
00:13:18
fullest. Here's a quick ad and then
00:13:21
we'll get back to the show. Did you know
00:13:23
my written blog, The Best Interest, was
00:13:25
nominated for 2022 Personal Finance Blog
00:13:28
of the Year? and it's been highlighted
00:13:30
in the Wall Street Journal, Yahoo
00:13:31
Finance, and on CNBC. I love writing,
00:13:34
especially when that writing is to share
00:13:36
financial education. And I usually write
00:13:38
one or two articles per week. You can
00:13:41
read them all at
00:13:43
bestinterest.blog. Again, the web
00:13:45
address is
00:13:47
bestinterest.blog. Check it out. The
00:13:49
next question I want to dive into from
00:13:51
the study is, how would you rate
00:13:52
yourself in terms of having a clear
00:13:54
vision and a plan for your life in
00:13:56
retirement? a clear vision and a plan
00:13:58
for your life and retirement. This
00:14:00
question, it got the lowest proportion
00:14:01
of self-reported strong or good
00:14:04
responses of all the questions in the
00:14:06
study. And that was specifically true
00:14:08
for people who are yet to retire. So on
00:14:10
the one hand, I hear that and I think
00:14:12
well maybe the future is just too foggy
00:14:14
for all of us to say we have a clear
00:14:16
vision for retirement or perhaps many
00:14:18
people do they don't want a rigid vision
00:14:20
and a plan for retirement. But we don't
00:14:22
want to wing it. We don't want to go
00:14:23
into retirement with no vision at all.
00:14:25
And it's a good reminder that retirement
00:14:27
again, it's not a financial event. Yes,
00:14:30
finances are part of it, but retirement
00:14:32
really is a life transition. And so, if
00:14:35
you are struggling with a vision or
00:14:36
struggling with a plan or simply if you
00:14:38
want to start putting your vision and
00:14:40
plan together, I think that's probably
00:14:41
the best place to start. If you're
00:14:43
already retired, hopefully that's
00:14:44
something you've been doing or you've
00:14:45
been working on it. I still think these
00:14:47
exercises I'm about to go through will
00:14:48
be helpful for you, but especially if
00:14:50
you're a pre-retiree and you feel like
00:14:53
you don't really have good vibes when it
00:14:55
comes to having a clear vision or having
00:14:57
a clear plan for your life in
00:14:58
retirement. Here are three really
00:15:00
interesting exercises that I think will
00:15:02
help you. The first one is called the
00:15:03
perfect day exercise. The goal of this
00:15:06
exercise, as the name probably implies,
00:15:08
right, is to create some sort of vivid
00:15:10
picture of what your ideal retirement
00:15:12
day will look like. And then you can
00:15:14
work backward to build a life that
00:15:15
supports that idea. Prompt would be
00:15:17
imagine you wake up in your ideal
00:15:19
retirement life. What time are you
00:15:21
waking up? Where are you? Who are you
00:15:23
with? And then what do you do next? And
00:15:25
then what do you do next? And then what
00:15:26
do you do next? And who are you with for
00:15:27
that? And who are you meeting up? And
00:15:29
what's the weather like? What kind of
00:15:30
activities are you doing? What are you
00:15:31
eating? What are you drinking? How are
00:15:33
you spending your time? So, it's
00:15:35
answering all those important, you know,
00:15:36
who, what, when, where, why, and how
00:15:38
questions to build yourself an ideal
00:15:41
day, soup to nuts of the entire schedule
00:15:44
from your morning coffee to your
00:15:45
bedtime, including as much detail as you
00:15:48
can possibly muster, sights and smells
00:15:50
and people and activity, your dog, this
00:15:53
walk, whatever it may be, playing this
00:15:55
instrument, going to see this concert,
00:15:57
going to play pickup basketball,
00:15:58
whatever it may be. Every single thing,
00:15:59
as much detail as possible. And the
00:16:01
whole idea is that we want to move the
00:16:03
idea of retirement from vague to vivid.
00:16:06
We want as much vivid detail as we
00:16:08
possibly can. And the idea is once you
00:16:10
can see that vivid image of your ideal
00:16:12
day, you will be more motivated to build
00:16:14
it. You will start to go through piece
00:16:16
by piece. And I I recommend writing this
00:16:18
down because it is the kind of thing
00:16:19
where for at least maybe it's way my
00:16:20
brain works is I want to write it down
00:16:22
and I want to break it up into chunks
00:16:23
and I want to say well for this part of
00:16:25
my day, how do I build a life that gets
00:16:26
me that? For that part of my day, how do
00:16:28
I build a life that gets me there? You
00:16:29
know, going back to a couple other
00:16:31
previous questions, where do I need to
00:16:32
live to be able to execute this perfect
00:16:34
day? How healthy do I need to be to
00:16:36
execute this perfect day? What's the
00:16:38
financial component involved of
00:16:39
executing this perfect day? But again,
00:16:42
if we can go from vague images of
00:16:44
retirement to this vivid image of an
00:16:46
ideal day, you will be motivated to go
00:16:49
out and build it. The second cool
00:16:51
exercise is called the icky guy map. And
00:16:53
now icky guy, it's one of those things
00:16:55
where if you've heard of it, I feel like
00:16:56
you probably think it's way overused. If
00:16:58
you haven't heard of it, okay, I'll
00:16:59
define it for you. It's a Japanese word
00:17:01
loosely translates to reason for being.
00:17:04
And it's often shown and drawn using
00:17:07
these four overlapping circles in a ven
00:17:09
diagram. And the four overlapping
00:17:11
circles are labeled what I love, what
00:17:14
I'm good at, what the world needs, and
00:17:16
what I can be useful for. Again, this
00:17:18
what I love, what I'm good at, what the
00:17:21
world needs, and what I can be useful
00:17:23
for. And the goal of this exercise is to
00:17:25
try to align your retirement activities
00:17:28
with some sort of deeper sense of
00:17:30
purpose and fulfillment. Again, what I
00:17:32
would do is I would take a 8 by11 sheet
00:17:34
of paper. I would make these four
00:17:35
circles, make this ven diagram. Or you
00:17:37
can just Google it. You can Google the
00:17:38
word icky guy and find this ven diagram
00:17:41
in about 2 seconds. And then start
00:17:42
filling in each circle. And especially
00:17:44
think about the intersections, right?
00:17:46
Think about that intersection in the
00:17:47
middle. Are there activities that you
00:17:49
love and you're good at, but also that
00:17:51
the world needs and that you can be
00:17:52
useful for? Now, that last one, what I
00:17:54
can be useful for, I will say I think
00:17:56
there are versions of this icky guy map
00:17:58
where they say what you can be paid for.
00:17:59
I mean, now that you're retired, you
00:18:00
probably don't need to be paid for it,
00:18:02
but it is the kind of thing where it's
00:18:03
hopefully someone else in the world
00:18:05
appreciates the fact that you're doing
00:18:06
it. And depending on which circles are
00:18:09
overlapping with water, I really I guess
00:18:10
the way I should say it is depending on
00:18:12
where your activities fall in this ven
00:18:14
diagram, you'll see, you know, the
00:18:15
combination of what you're good at and
00:18:17
what you love is a passion. The
00:18:19
combination of what you love and what
00:18:21
the world needs, well, that might be a
00:18:22
mission. The combination of say what
00:18:24
you're good at and what you can be paid
00:18:25
for or what what you can be useful for,
00:18:27
that might just be a profession or
00:18:28
something like that. But if all four of
00:18:31
these things get fulfilled at once, that
00:18:32
would be your icky guy as they say. And
00:18:35
that's something to really focus on
00:18:36
because we want to think beyond just
00:18:38
keeping busy and we definitely want to
00:18:39
move toward feeling useful and feeling
00:18:41
alive. And then the last exercise of
00:18:44
these three exercises is the rocking
00:18:46
chair test. And the goal here is to
00:18:47
clarify what really matters in the long
00:18:49
run. And I always find these things
00:18:51
challenging. I'm I'm curious if you guys
00:18:52
find them easier where someone says, you
00:18:54
know, picture yourself in 20 years.
00:18:56
Picture yourself in 30 years. But that
00:18:57
is the nature of this exercise is to
00:18:59
picture yourself 20 or 30 years from now
00:19:01
sitting down on your porch in your
00:19:02
favorite chair looking back on your
00:19:04
retirement or again if you're not
00:19:06
retired yet again it's picture yourself
00:19:08
at age 80 or age 85 looking backward on
00:19:11
what your retirement has been and what
00:19:13
do you want to be proud of if you're
00:19:15
sitting in that chair 30 years from now
00:19:17
what do you want to be proud of what do
00:19:19
you want to have experienced what do you
00:19:21
want to have contributed or learned how
00:19:23
do you want to spend your time again so
00:19:25
this exercise works because it flips the
00:19:27
script from the short-term wants of
00:19:29
right now, of this week, of this month,
00:19:31
and it zooms out to longer term meaning.
00:19:33
It encourages intentionality, not just
00:19:35
activity. It reminds me of some of the
00:19:37
exercises we talked before with Doc G on
00:19:39
this podcast when it comes to some of
00:19:41
the lessons that he learned when people
00:19:43
are at end of life. Some of the lessons
00:19:44
when when people are right, they're in
00:19:46
hospice, they're on their deathbed, and
00:19:48
what are their biggest regrets or what
00:19:50
are the things that they cared most
00:19:51
about in life. And what you often find
00:19:53
is like it's basically a version of
00:19:55
don't sweat the small stuff and that
00:19:57
there are certain big factors in life
00:19:59
that matter a lot more. And so I think
00:20:01
if we use this rocking chair test and we
00:20:03
think about ourselves in 20 or 30 years
00:20:04
or we think about ourselves as this old
00:20:06
person sitting contentedly in their
00:20:08
rocking chair, what do you want to be
00:20:10
proud of in that moment or what do you
00:20:12
want to have experienced in that moment?
00:20:14
And that exercise, this rocking chair
00:20:16
test exercise, I think can help us shape
00:20:18
exactly what we want our vision and plan
00:20:20
for retirement to be. Here's a quick ad
00:20:23
and then we'll get back to the show.
00:20:25
Serious question. Why do podcasters
00:20:27
constantly ask for ratings and reviews?
00:20:30
Yes, they do help highlight our shows to
00:20:32
new listeners. They help strangers find
00:20:34
us on Apple Podcast and Spotify. It's
00:20:36
totally true and a good reason to ask
00:20:38
for ratings and reviews. But I have
00:20:40
something more important, at least more
00:20:42
important to me. I want to know if you
00:20:44
like this stuff. I want to know if you
00:20:46
like my podcast episodes, my monologues,
00:20:48
my guests, the information I share with
00:20:50
you and the stories I tell. I want to
00:20:52
improve and make your listening more
00:20:54
enjoyable in the process. So yeah, I
00:20:56
would love to read your reviews. And
00:20:58
sure, if you throw a rating in there,
00:21:00
too, that's great. If you like what I'm
00:21:02
doing, please share it with me. It's
00:21:04
such a great feeling to read your
00:21:05
feedback. I'd love to read your review
00:21:08
or see a rating on Apple Podcast or
00:21:10
Spotify. Thank you. Next, I want to
00:21:13
pivot a bit to the the last section of
00:21:14
the study where the authors Fritz and
00:21:16
Eric, they specifically call out the
00:21:18
biggest differences between the pre and
00:21:20
the postretirees. I think a huge part of
00:21:22
this section, a huge takeaway is
00:21:24
essentially is that people think
00:21:26
retirement is this particular way, but
00:21:28
it turns out that it's actually that
00:21:30
particular way. And having those
00:21:32
preconceived notions kind of turned on
00:21:34
their head is a really big takeaway that
00:21:36
we can all take from the study. Now, for
00:21:38
starters, the study found that
00:21:39
pre-retirees are less worried than
00:21:42
post-retirees about their health, about
00:21:44
family crises, about economic and
00:21:47
political turmoil. Instead, pre-retirees
00:21:49
are much more worried about outliving
00:21:51
their savings and rising health care
00:21:53
costs. The post-retirees aren't nearly
00:21:55
as worried about those things. So, in
00:21:57
other words, pre-retirees are worried
00:21:59
most about the financial aspect of
00:22:01
retirement. Post-retirees, those who
00:22:03
have actually walked the walk, those who
00:22:05
have actually been there and done that,
00:22:06
post-retirees are much more likely to
00:22:08
worry about the non-financial aspects of
00:22:10
retirement. I think that's a huge
00:22:12
takeaway. If you're a pre-retiree and
00:22:14
you're really worried about your
00:22:15
finances, I mean, listen, get those
00:22:17
finances in order. That's kind of why
00:22:18
we're here in the first place. That's a
00:22:19
big thing that we talk about here. But
00:22:21
you also have to realize that most of
00:22:23
the people who have walked this path
00:22:24
before you, maybe they were worried
00:22:26
about finances too when they were your
00:22:28
age. But now that they're actually in
00:22:29
retirement, they are much more likely to
00:22:31
worry about non-financial aspects of
00:22:33
retirement. Okay. Hey, I want to hone in
00:22:35
on the work and career section of this
00:22:38
part of the study because when it comes
00:22:40
to your workplace, most pre-retirees
00:22:42
still working, when they think about
00:22:44
retirement, they don't feel like they're
00:22:46
going to be very concerned about their
00:22:48
social interactions from work and the
00:22:50
fact that they really won't have those
00:22:51
anymore in retirement. They're not
00:22:53
really concerned about the mental
00:22:54
stimulation they get from work and the
00:22:56
fact that that might disappear in
00:22:57
retirement. And they're not really
00:22:58
concerned about the sense of identity
00:23:00
that they get from their career and
00:23:02
their from their work. they figure out,
00:23:03
you know, they think something's going
00:23:04
to replace that once they get to
00:23:06
retirement. But most
00:23:09
postretirees reported all three of those
00:23:11
concerns much more severely. In other
00:23:14
words, it's not until your career ends
00:23:16
and you actually retire that you realize
00:23:18
how much you will miss your social
00:23:20
interactions at work. That's when you'll
00:23:22
realize how much you'll miss the mental
00:23:24
stimulation of work. And retirement is
00:23:26
also when you'll realize that you've
00:23:28
lost your sense of identity or some
00:23:30
sense of identity that you had tied to
00:23:32
being a professional. In other words,
00:23:34
there's a decent chance that many of you
00:23:36
listening right now might think to
00:23:38
yourself, eh, I'll be good without work.
00:23:40
I'll replace the social interactions. I
00:23:42
don't need work to define my identity.
00:23:43
And some of you might be right. But many
00:23:45
of you will end up being wrong. So my
00:23:48
takeaway is to not underestimate those
00:23:50
things. The social interactions you get
00:23:51
from work are huge and most likely
00:23:53
you'll need to replace them in some way
00:23:55
in retirement. The mental stimulation
00:23:57
you get from work, right? It's 40 hours
00:23:59
plus every single week. You'll need to
00:24:01
replace that somehow in retirement. And
00:24:03
then the sense of identity that we get
00:24:04
from work. A lot of people out there are
00:24:06
proud to have been an engineer, a
00:24:08
teacher, a firefighter. I get great
00:24:10
sense of identity from sitting here
00:24:12
thinking to myself, I'm a financial
00:24:13
planner. I write a blog. I produce a
00:24:15
podcast. I like that as part of my sense
00:24:17
of identity. And for that just to
00:24:19
disappear overnight, I'm probably gonna
00:24:21
need to replace it somehow. I mean, I
00:24:23
can't even really picture that myself.
00:24:25
So anyway, that's something huge and and
00:24:27
it's again a big lesson that we can take
00:24:29
away where the pre-retireye assumptions
00:24:31
do not line up well with the reality of
00:24:34
retirement. But perhaps there's no
00:24:36
better overall takeaway than this final
00:24:38
question that I'll review today. The
00:24:40
question posed in the study is the
00:24:43
transition to retirement was or will be
00:24:45
smooth. So again the question is the
00:24:47
transition to retirement either was or
00:24:50
will be smooth. 75% of the pre-retirees
00:24:53
still working they responded in a
00:24:55
positive manner to this question and 20%
00:24:57
responded in a neutral manner. Only 5%
00:25:00
of the people still working believed
00:25:02
that their transition to retirement
00:25:04
would not be smooth and responded in a
00:25:06
negative manner. But for the
00:25:08
postretirees about half respond
00:25:10
positively 25% respond negatively and
00:25:13
25% respond in a neutral manner. So, my
00:25:15
simple takeaway is that many people
00:25:17
assume their transition to retirement
00:25:19
will be smooth and they end up being
00:25:21
wrong. I suppose this entire podcast
00:25:24
episode can be boiled down into that.
00:25:26
Many people assume their transition to
00:25:28
retirement will be smooth and they end
00:25:30
up being wrong. So, my my advice to you
00:25:32
is to do your best and to do what you
00:25:34
can to make sure that that is not you.
00:25:36
We want a smooth transition into
00:25:38
retirement. I think one of the most
00:25:40
powerful things we can do, especially as
00:25:41
planners, as DIYers, as people who care
00:25:44
about our own future financial plan, our
00:25:46
own retirement, is to listen. If we
00:25:48
really try to hear from folks who have
00:25:50
already crossed that retirement
00:25:51
threshold, what will they tell us? It's
00:25:53
very often different, as we've seen
00:25:55
today, it's different from what we would
00:25:56
expect as pre-retirees. It's different
00:25:58
from what we might assume as
00:26:00
pre-retirees. Before retirement, we
00:26:02
imagine freedom and flexibility. No more
00:26:04
meetings, no more alarm clocks. That's a
00:26:06
nice one. And hey, some of that is true.
00:26:08
But the retirees that I talk to at work,
00:26:11
the retirees in this study, they share
00:26:13
something deeper, something more honest.
00:26:14
They say, "You know what? I
00:26:16
underestimated how much of my identity
00:26:17
came from work. I didn't realize how
00:26:19
quickly I'd have a reason to get up in
00:26:21
the morning. No one warned me how lonely
00:26:23
this could feel over and over again. I
00:26:25
wish I had taken my health more
00:26:26
seriously and earlier in my life because
00:26:29
it's not just about the time when you
00:26:30
retire. It's not just about the money.
00:26:32
It's about having the energy, the
00:26:33
vitality to enjoy the life that you
00:26:35
built. Social connections too, right?
00:26:37
They fade faster than we expect. The
00:26:39
casual relationships of the office,
00:26:41
maybe it's the banter, the camaraderie,
00:26:43
they matter more than we give them
00:26:44
credit for. Without a plan to replace
00:26:46
those relationships, retirement can feel
00:26:48
and often does feel surprisingly
00:26:50
isolating. So, the takeaway is not just
00:26:52
to prepare your portfolio or your tax
00:26:55
planning, but to prepare your life, to
00:26:57
craft a vision, to build good habits, to
00:26:59
nurture friendships, to prioritize your
00:27:01
body and your brain. Because the people
00:27:03
who tend to thrive in retirement, they
00:27:05
aren't just lucky. It didn't just
00:27:06
happen. They're intentional about it.
00:27:09
They didn't just retire from something,
00:27:11
their career. They retired to something.
00:27:14
And that makes all the difference. So,
00:27:16
thank you again to Fritz Gilbert and
00:27:17
Eric Wigel and the couple thousand
00:27:19
people in their audiences who
00:27:21
participated in the study. Listeners, if
00:27:23
you want to go check out that study for
00:27:24
yourself, we are going to throw a link
00:27:25
for you in the show notes. Thank you
00:27:27
again for listening and we will talk to
00:27:29
you next episode. Thanks for tuning in
00:27:31
to this episode of Personal Finance for
00:27:33
Long-Term Investors. If you have a
00:27:35
question for Jesse to answer on a future
00:27:37
episode, send him an email over at his
00:27:39
blog, The Best Interest. His email
00:27:41
address is
00:27:43
[email protected]. Again, that's
00:27:47
[email protected]. Did you enjoy
00:27:49
the show? Subscribe, rate, and review
00:27:51
the podcast wherever you listen. This
00:27:53
helps others find the show and invest in
00:27:55
knowledge themselves, and we really
00:27:58
appreciate it. We'll catch you on the
00:27:59
next episode of Personal Finance for
00:28:01
Long-Term Investors. Personal Finance
00:28:04
for Long-Term Investors is a personal
00:28:06
podcast meant for education and
00:28:08
entertainment. It should not be taken as
00:28:10
financial advice and it's not
00:28:11
prescriptive of your financial
00:28:13
situation.