4 Key Elements to Prepare for Retirement

Preparing for retirement is not hard, but it must be intentional.

Advancing age is automatic. Good preparation for advancing age is not. There is the old adage, “When you aim at nothing, you are sure to hit it.” Unfortunately, many of us don’t think of retirement as something to plan for unless we feel guilty for not saving or not saving enough.

Retirement is not all about money. As a matter of fact, there are many more important topics about retirement than money. That being said, if you don’t have enough money, it becomes a big problem all by itself. It is a good idea to begin preparing, continue preparing, and be prepared.

Unfortunately, most people of faith, when asked what they are going to do in retirement, answer with “nothing” or some variation of it. This answer reflects our culture rather than reflecting the plan God has for them during their last 3 stages of life. Yes, He has a plan for those times too and the plan is not reflected in the “nothing” answer or the one that describes leisure. The answers identifying leisure as the objective are stated as though leisure has both meaning and purpose. When in fact, it has neither.

Some rest, travel and recharging of our batteries are all good but not for 30 years, or the length of time we should use as our planning horizon, once we hit our 60s. The purpose of leisure is as a reward and a way to re-invigorate, re-focus, and re-engage with the next life stage. Anything that puts a solitary focus on ourselves has short-term value and is a long-term waste because it distracts from God’s plan for us. It’s the plan that’s important and, of course, our putting it into action.

Here are 4 keys to the preparation process:

1.  Emotions drive action. Knowing God’s plan for your life and being excited about it is the number one pre-requisite to financial preparation.

We’d like to think the knowing or understanding about a subject will lead to subsequent action. Unfortunately, knowing or even understanding does not lead to sustainable action.

I often travel through the Frankfurt airport. While waiting for another flight, I’ve wandered into the Duty-Free store. On the right, as you enter is a wall full of cartons of cigarettes. The sign identifying this as the area to purchase cigarettes carries the headline, “Smoking will kill you.” On each carton, the warning appears too. “Smoking will kill you." The warning is big, bold, prominent, clear, and unavoidable. Travelers are lined up with their baskets to purchase multiple cartons of what is guaranteed to kill them. Knowing does not change habits. Even if it kills you.

The Bible is the most purchased book in history. Every year it’s on the bestseller list. How many people have read it, even cover to cover, and there is no change in lifestyle or relationships with others? Knowledge does not prompt action. Most of the world knows the Golden Rule: “Do unto others as you want them to do to you.” They even believe that the formula is true, they just don’t follow it. Knowledge does not prompt action.

It is the emotion that drives action. Emotion gives energy to an idea. It is this energy we need to take the first step and then continue on the journey. When an action is supported by knowledge, there is an even greater likelihood of sustainable movement. Starting and ceasing to stop is the formula needed to demonstrate both love and savings. Strange how they go together.

2. The security of knowing that saving is actually taking place sustains the action and is critical for the preparation needed for a lifetime of ministry.

Do you remember the first time you rode a bike? That time when your mom or dad let go and you were riding by yourself? The prospect of freedom from your feet by the opportunity of two wheels and the day the training wheels came off and you rode straight up rather than a little sideways? Actually, riding the first time gave you the confidence to ride again and again and again. The emotion stays with you and confidence now propels you.

Saving is similar. Either you go online, or the account statement shows up in the mail. You open it up and see the report of your contributions, maybe your employer’s contribution if it is a 401k or 403b plan, and the earnings from your investment choices. There is a little rush, and the thought, “Maybe this will really work and I’ll have enough for retirement.”  It’s easy to keep contributing and to keep saving when you see the results of your decision to do it.

3. Discovering your money personality and understanding how you interact with money is vital to sustained saving.

Beginning to save is critical. My grandfather often observed, “Once begun is half done.” While starting is the hardest, not stopping, or continuing to save is the other half. It is just as critical. Starting is important but how you finish is critical.

An important key to finishing is understanding our money personality, plus that of your spouse.

As we grow relationally and spiritually, we learn more and more about who we are, who God is and the issues that surround all of our relationships. It is important to understand:

  1. Our relationship with God,

  2. Our relationship with ourselves, and

  3. Our relationship with others.

A critical part of number 2, understanding our relationship with ourselves, is understanding our money personality. Because money is a component of almost every decision we make, including savings, knowing how we think and what drives us about money is critical. If I’m a spender, my challenge will be saving. If I’m a risk taker, saving conservatively and regularly may be difficult. If I’m a saver, setting saving priorities may be difficult.

Knowing your money personality is important for saving and for relationships.

Check out TheMoneyCouple.com for an easy assessment of your money profile and learn about both your Primary and Secondary money personality. It is as valuable as the “Love Languages.” Try it—you’ll like it.

4. Your financial plan and commitment to action must reflect the passion of your priorities and the reality of your money personality.

In order to hit your financial goals, respond to your financial needs, and prepare for your future ministry opportunities, retirement savings must be consistent and sustainable. Getting excited about your future and committing 40% of your paycheck to a retirement fund is not sustainable. Your decisions are prompted by the excitement of your commitment to God’s plan. They are supported by your understanding of the need and the reality of your financial situation. The reality of your financial situation is governed by your money personalities combined with your income and expenses. Discover your financial landscape—it tells you where you are and sets the starting point for future growth.

Preparing financially for retirement takes time, almost as much time as actually living in retirement. Because we are all called to ministry for a lifetime, putting a Future Funded Ministry plan in place is the best plan of action. You can enjoy the journey as well as the result.

Bruce Bruinsma