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By: Michael Ciaciuch, CFP®, AIF®, posted on 02/24/2017

What Color Is Your Parachute for Retirement

What Color Is Your Parachute for Retirement

Like “Younger Next Year” and “Don’t Retire – Rewire,” this book addresses the lifestyle side of retirement. I will reference material from it during my upcoming “Someday Is Here” OLLI class at SVSU in April.

Nelson and Bolles provide a brief history of retirement in Chapter One: Retirement Is Dead – Long Live Retirement. They point out that until the industrial revolution, retirement didn’t exist. Over the history of mankind, people worked for themselves or for their family. They were farmers, hunters or craftsman. As they aged, they did less physical work and more of the non-physical work. When Social Security was instituted in 1936 with a standardized age - retirement became an all-or-nothing event. Retirement became the finish line of life.

Nelson states in the Preface that this is not a finance book (although it is about prosperity). It’s not a medical book (although it is about health). And it’s not a psychology book (although it is about happiness). It’s a well-being book. They describe well-being as comprised of three parts. 1) Prosperity: well-being for our physical environment. 2) Health: well-being for our physical body. 3) Happiness: well-being in our nonphysical self.

For me, the key takeaway from this book was the discussion on happiness. “Some amounts of prosperity and health are probably necessary, but not sufficient, to produce happiness. If you don’t have much prosperity (you’re poor), you probably won’t be happy. If you don’t have much health (you’re sick), you probably won’t be happy, either. But no amount of prosperity or health, either alone or in combination, can produce happiness. They make it more likely, but they can’t create it. You need to create happiness directly. Also remember that prosperity and health are physical states and happiness is a nonphysical state.”

The authors also address materialism and our consumer based society, culminating with the question, “Are you buying a lifestyle or building a life.” This leads to the discussion on core beliefs, or core values. They propose that activating your core values is paramount to achieving happiness. “One of life’s great truths is this: The questions that don’t have right or wrong answers are the ones we use to evaluate our lives. The decisions we need to base on internal values – not external data – are the ones we judge ourselves by. When we look back, those are the ones that let us say, I’ve lived a wonderful live and I’ve done a good job. Or not.”

The book includes several exercises, including a questionnaire that, indicates your core values. They provide another exercise to activate your core values, that is, confirm your guiding principles, before you design your next stage of life. When you activate your core values, you’re more likely to act according to them. Living in alignment with your core values allows you to say, “I lived a wonderful life” and “I did a good job!” Who doesn’t want that?