Why Retirement Planning Is Important

Recognizing the importance of retirement planning starts with understanding what retirement actually is. Most people think of retirement as when you stop working, which is true. However, the best definition of retirement planning is creating a plan to earn an income without physically working. As a result, retirement would be better described as the point in time you no longer need to work to generate an income. Retirement planning is important because everyone should have a plan to generate consistent income without needing to work.

Time for something new

I learned the importance of retirement planning when I quit my lucrative corporate job managing the pricing department of a $2B company. I nearly lost everything when I quit my job to start a business. I had a few thousand dollars in my retirement account and knew it was a race against time to build an income to replace my lost income. What I didn’t expect was how difficult it would be to get my business off the ground.

I remember packing up our last items in the U-Haul moving truck as we backed out of our home for the last time. We built that house from the ground up, filled it with memories and even grew our family in that house. Our family has always valued freedom above money, but we didn’t understand what freedom really was. We were valuing the freedom of choice. The ability to choose when and where we worked and how we allocated our time each day.

Would look at people going to jobs they hated and feel bad for them. Thinking they didn’t have the right priorities in life and were sacrificing their time for money. And I would think to myself, my life isn’t all rainbows and skittles, but at least I have the freedom to choose how I spend my time. Was able to homeschool my children and spend all day with my family. While it would make me feel good to say these things, I asked myself why I was saying these judgmental things to myself. I slowly began to realize the life I thought was freedom, was anything but.

When you fail to plan, you plan to fail

I couldn’t afford my lifestyle with the income the business was generating, so I started working as a Lyft driver. Was out at all hours of the night, away from my family, driving in some of the most dangerous parts of town. Worst of all, was only making a fraction of what I was making in my corporate job. Then, I would come home and feel I needed to work in the business to have any hopes of building the income I needed. At this moment, I realized I was every bit as bad if not worse than those people working all day in jobs they hated. In many ways, I was worse because I knew better. I had every opportunity to succeed. I had parents who raised me right, a Master’s degree in Economics and a lucrative career. Now, I was someone making less minimum wage, unable to pay his bills, unable to pay his mortgage and unable to buy his children Christmas presents.

And if that weren’t enough, while on a trip to Nigeria with my father-in-law, I contracted Malaria and almost died (a story for another time). And while volunteering at a summer camp, I ruptured my patella tendon and needed surgery. I’ve lived my entire life relatively healthy and the moment I don’t have health insurance, I have these two major events take place. This is when I realized, at least those working in jobs they hated were receiving a compensation that allowed them to spend more time with their family than I was. They had jobs that make it easier for them to pay for hospital visits and unexpected events. This was a devastating experience for me. I saw myself as the provider, but I was the burden for my family, friends and loved ones. That was when I decided I needed to change something.

Short lived without a retirement plan

Having already emptied everything out of my 401(k), my only option was to find traditional work to supplement the business income. While it was not my intention, I experienced what many who attempt to retire go through. You go from a life earning money from a job to having to live off of the money you have saved. As that money runs out, you must find creative ways to make enough money to make ends meet. During this time, you attempt to lower your overall expenses by downsizing and simplifying your life. Then, unexpected and unplanned health issues arise that push you further into financial hardship. And if you are still unable to generate enough income to maintain your retirement, you have to return to full-time work.

Final thoughts

My experiences taught me that in order to have the freedom I desired, I needed to change my relationship with money. Instead of working for money, I needed to find a way to have my money for me. Proper retirement planning ensures you don’t need to return to the workforce and can focus on creating wonderful experiences with your friends and family. Retirement planning is important because it guarantees you maintain the freedom to enjoy life today and in the future. This problem led me to discover and perfect a system that allowed me to overcome my own financial challenges. If you want to learn more, watch our free “Freedom to Enjoy Life and Retirement, using the Wisdometric Framework” training.

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