4. Create 3 scenarios for retirement

In my prior article, Define what retirement means to you, we discussed your health, age and likely lifespan.  This was important to understand what will make you happy in retirement.

In this post, we will explore three retirement scenarios.  The first is a retirement where you have all your basic needs taken care of and you come to realize that all the best things in life are truly free.  The second scenario is the same as the first except you have enough saved to do some extra things like international travel, eat out more often or perhaps spoil the grandchildren.  The third scenario is where you go all out and do all the things you always dreamed of doing like a round-the-world cruise, buying a decked-out RV and visiting every state or even taking your adult kids and grandkids on a vacation in the Bahamas.  The important thing is to shoot for the moon and then pull pack to scenario 2 and 1 based on your actual financial situation at retirement.

Scenario 1

So, what are the basics to a happy retirement?  Let’s see, you need somewhere to live that is safe and comfortable.  You need healthy tasty food three times a day.  You need medical insurance because with age come health care needs.  What else?  Oh yeah, you need transportation, you need entertainment (not just watching TV), and you need friends and family.  This should be your basic happy retirement scenario.  The variables are where you live, the food you eat, the type of transportation and what you do for fun. 

Here is an example of what I would consider my scenario 1 retirement:

Renting a nice 2-bedroom apartment somewhere close to friends and family.  My wife and I would cook our own meals and occasionally go out to a nice restaurant with friends.  We would take long walks along the ocean or nearby lake in the evenings; perhaps even around outdoor shopping malls to people watch and window shop. We would get around in an economical SUV and take road trips to nearby mountain or desert tourist spots.  I enjoy reading books, exercising and learning about starting online businesses.  Life is good.

Scenario 2

Having more money allows you to do more interesting things.  For example, taking an exotic 3-week cruise once or twice a year, paying to have the kids (grown up as they are) join you for a winter holiday in a mountain cabin, buying or leasing a fancy car (Porsche, Corvette, etc.), and so on.  In this scenario, you may want to have a nicer home or, perhaps, own a vacation home that you share with your family. 

Here is an example of what I would consider my scenario 3 retirement:

Renting a nice 2-bedroom house within walking distance of a movie theater or shopping area.  Hosting parties with all our friends and family.  Picking up golf again and playing regularly.  Taking my wife out to a nice cruise (Alaska, Mediterranean, Caribbean, etc.) a couple times a year.  In addition to having a SUV, I would have a used sports car (911) and go out to bread-and-breakfast mini vacations every other month.  For my hobby, I would continue doing entrepreneurial projects.  Life is great!

Scenario 3

Money is not a constraint in this scenario.  You can do pretty much anything you want.  However, I suspect that most of you reading this series of articles are not in a situation where you have unlimited wealth.  So, this category is really for people that are lucky to have all their needs covered plus enough saved up to enjoy the finer things in life and take on some philanthropic projects as well.  After all, helping others can bring great satisfaction and joy if you have the means to do so (actually, you can get a lot of the same joy by just volunteering your time – this can be done in any scenario).

Here is an example of what I would consider my scenario 3 retirement:

Owning/renting a beach house where we can fall asleep by the sound of the ocean waves.  Taking four major trips each year to exotic places staying in the best hotels and taking incredible excursions to explore new cultures (and bringing our family and friends too).  A Porsche Cayan for my wife and a Maserati GranTurismo for me.  Starting a foundation to help orphaned children in third world countries (just got back from Vietnam where the small amount we were able to give made a world of difference for the children – we felt great…imagine how we would feel if we could do more!).  Life is incredible!

Now it’s your turn.  Write down your three scenarios.  Try to visualize what it would be like living each one.  If you like, share your scenario in the comment section below, it may inspire others to do the same.

Next article will be about how to calculate income requirements for each retirement scenario.  You will go through each of the three retirement scenarios and estimate what the cost will be to achieve them. 




P.S.,  Please share your retirement scenarios below.

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