#1 Thing To Do For Retirement Happiness

Shhhhh….Keep This Between Us, Please. If word got out, I’d have no work.

Today’s post may be the most important you ever read because I am going to share with you the TWO things you need for a successful retirement.

Now, you still can have a successful retirement without these two things, don’t get me wrong.
But with these two things at your disposal you’re unstoppable.

What exactly are these two things? Well, let me share a story with you first that prompted me to write this email today.

A dear friend of mine and I were working on her retirement plan this morning. I’ve know this lady for over 15 years. That means I’ve known her longer than I’ve known 3 of my 4 kids. Now that’s a relationship if there ever were one.

Anyway, she is crunching numbers on what she should do to make sure she is good to go for retirement. Will she have to go back to work? Will she have to drop her cable plan? Sell her house?

Many Women Are On Their Own Financially

You know, the lighthearted stuff, that’s what she’s thinking about. And, unfortunately, like a lot of women, she has to tackle these topics on her own. (You should just see my Youtube channel. The comments will break your heart about what some ladies are having to deal with as they approach retirement.)

Now, as much as I’d love to say I’m so smart as was able to solve all her problems like a white knight, that simply is not the case. But working together we were able to come up with a wonderful plan that without question will see her through. And the amazing thing is, the plan is so simple, and full of so much common sense, she’ll be able to manage this on her own without any help from ole Josh. (Which is why I ask you not to share these secrets with anyone because I still need the work.)

Guaranteed Income = Anticipated Expenses

In a nutshell the plan is to have guaranteed income cover her anticipated expenses. That is the first key to a successful retirement plan. She thinks she’d live comfortably on $3,000 a month, let’s plan for Social Security, a small pension and an annuity to provide that to her. If her portfolio grows too, why that’s fantastic. But that’s just icing on the cake.

I bet some of you are even saying right now, “Whoa, she only needs $3k a month? That doesn’t seem realistic.”

No Debt Makes Retirement Planning Easy

Oh, but it is. And thus we have the second key to a successful retirement… no debt. The reason her expenses are so low is because her housing costs are almost non-existent due to the fact she has no mortgage. As I’ve said a million times if I’ve said it once, the number one expense for retirees is housing. NOTHING even comes remotely close. What makes one’s housing costs so high??? You got it, a mortgage payment! (Secondly is property tax which is why my top ten states for retirees to avoid all have high property taxes). But in this lady’s state, the property taxes are very low.

No Need To Rely On the Markets

No debt, guaranteed income to cover her expenses with a Cost of Living Adjustment in Social Security, and she is good to go. We don’t need to rely on any 4% rule now. Or what if the markets tank because of Trump or Obama or what have you. Should we move out of X stocks and into Y bonds, etc? All that is irrelevant now in her retirement plan discussions.

So, I ask you. If you had your expenses covered by guaranteed income how much better would you feel about your retirement? I can answer that for you, you’d feel great. As does this lady when together we came up with her plan. In fact, you could even hear it in her voice, the relief. And let me tell you, there is nothing a financial planner loves to hear more than the sigh of relief from a client who sees, maybe for the first, that he or she is going to be okay. Everything else is secondary and even tertiary.

How Would You Feel If This Were You?

You want to have a successful retirement? Then find a way to have no debt and your expenses covered by guaranteed income. And that, my friends, is the key to retirement.

Everyone wants to achieve retirement happiness right?.  Yet, it never ceases to amaze me that when it comes to discussion about retirement, advisors and clients alike overlook the most important issue; whether or not there is a mortgage.

Why do I say this is the most important issue? Well, simply look at this study from the Bureau of Labor Statistics (BLS): “Housing was the greatest expense in average dollar amount and as a share of the household budget for older households. ” (Older households being over the age of 55).

Housing is a Retirees Main Expense

Let me reiterate;  HOUSING EXPENSE is the greatest expense for households with people over the age of 55!

In fact if you dive into the numbers, nothing even remotely comes close. 

Looking at the study you will see that housing expense accounts for 1/3 or more of ALL expenditures, which is double the next biggest expenditure.

People always say health care will be the biggest expense for retirees.  I’ve heard this a million times, if I’ve heard it once. Yes, health care expenses do INCREASE the most, almost doubling in expenditures from the ages of 55-64 to above 75.  But even after that increase, those over 75 spend only 15.6% of their income on health care whereas they are spending 36.5% on housing.

Increasing Debt Levels

Unfortunately, the BLS study also points out “the proportion of families with heads age 55 or older with housing debt increased steadily from 24 percent in 1992 to 42 percent in 2010.”

More than ironic, comes this study from TowersWatson which shows that retirees happiness is declining, rather significantly actually.


Towers Watson points out that retirees who have income annuities are happier than retirees who don’t.  I won’t get into that discussion here. However, I will point out that I believe it is not a coincidence that as retirees carry more mortgage debt into retirement they are not quite as happy.

TowersWatson makes the case that annuitizing (turning assets into a monthly cash flow) can help retirees feel more comfortable.  I completely agree. But that overlooks the issue of why retirees aren’t comfortable to begin with. I argue it’s because more retirees have mortgages!

How To Achieve Retirement Happiness

According to the BLS, there has been an increase of roughly 65% of households over 55 years of age that have mortgages over the past 20 years or so.  Again, the TowersWatson study  shows that retirees level of satisfaction is dropping since the 90’s. Coincidence?  Heck no!

It’s not rocket science here, my friends.  You have debt, you have more worry. Crazy talk right?

Yet, my industry is consumed with things like investment returns, which is important but, in my not-so-humble opinion, we’re missing the forest for the trees; Mortgage Debt dwarfs EVERYTHING!  Focus on this first and the rest will take care of itself.

So, what do YOU do, dear reader? Simple, if you want to be happier in retirement, have no mortgage.  I argue having no mortgage is the number one thing you can do for retirement happiness.

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