Rethinking Retirement

Corey —  March 8, 2010 — 4 Comments

       Mike at The Oblivious Investor had a thought-provoking article titled Don’t Retire., which was inspired by Stephen Pollan and Mark Levine’s book Die Broke: A Radical Four-Part Financial Plan. Mike discusses why retirement as we imagine it today is probably an unreachable goal for most Baby Boomers and subsequent generations. Given the fact that many workers no longer receive pensions and don’t seem to be very good at saving on their own, I’d have to agree.


The History of Retirement

       The idea of retiring when you’re older is relatively new. It only seems to have become popular in the last century. There are several possible explanations for this, but the most likely ones are higher incomes (we enjoy a standard of living about eight times higher than Americans a century ago) and the creation of Social Security and pension programs (though the future of Social Security is unclear, and pensions are largely a thing of the past). If you’d like to read more about the history of retirement, I suggest these articles:

Economic History of Retirement in the United States (a more academic article)
The History of Retirement, From Early Man to A.A.R.P. (not quite as dry as the first)

       The truth is retirement was never really an option for our earlier ancestors. They didn’t have very long lives or the economic systems we have today. We also find no discussion of retirement in the Bible as we think of it today. There is one reference to the priests (Levites) retiring at age 50 from temple service, but they were to stay on to help the younger men (probably in giving advice and guidance). The only other semblance of retirement we see in the Bible is old men sitting at the city gate. The city gate was a place of honor, and those who sat there offered advice and counsel to those in the city. Again, the older people didn’t really retire but found other ways to serve their communities. Instead of working, they lived with their children and received support from them. But that’s rare today (unless you’re Amish).


How Should Christians View Retirement Today?

       Given the nature of the labor force today and the interaction of families, we do need to be saving for a time when we won’t be able to produce as much income as we can when we’re younger. Children are moving farther away from their parents for jobs or other reasons than they did in the past (or in the Bible). Several generations of a family living in the same house or very close to each other is no longer the norm. And the complication of health problems and other issues when you’re older can definitely impact your ability to earn income.

       However, the American view of retirement is far from God’s ideal for His followers. How does spending every day on the golf course, or sipping sweet tea on the back porch every day, or traveling the world for pleasure glorify God? The work of the kingdom of God is never ending. By focusing our entire lives on a retirement where we sit around, do whatever we want, and relax, we miss the picture of what God could be calling us to do when we no longer have to work as much to earn all of our money. On the other hand, a Christian retirement focused on contentment and serving God can allow for some leisure (just as during your working years) without neglecting the valuable work we can do to further God’s kingdom and show His love to the world.

       22 Then, turning to his disciples, Jesus said, “That is why I tell you not to worry about everyday life—whether you have enough food to eat or enough clothes to wear. 23 For life is more than food, and your body more than clothing. 24 Look at the ravens. They don’t plant or harvest or store food in barns, for God feeds them. And you are far more valuable to him than any birds! 25 Can all your worries add a single moment to your life? 26 And if worry can’t accomplish a little thing like that, what’s the use of worrying over bigger things?

       27 “Look at the lilies and how they grow. They don’t work or make their clothing, yet Solomon in all his glory was not dressed as beautifully as they are. 28 And if God cares so wonderfully for flowers that are here today and thrown into the fire tomorrow, he will certainly care for you. Why do you have so little faith?

       29 “And don’t be concerned about what to eat and what to drink. Don’t worry about such things. 30 These things dominate the thoughts of unbelievers all over the world, but your Father already knows your needs. 31 Seek the Kingdom of God above all else, and he will give you everything you need.

Luke 12:22-31 (NLT)



       We are not to seek a life that’s merely full of the pleasures of this world. God calls us to seek His kingdom first. When we put our focus on God and trust in Him, we no longer have to worry about our retirement accounts, government policies, economic disasters, or any other worries. When we have the glorious gift of Jesus Christ, we remain wealthy despite what happens to us in this life. We have riches that cannot fail, that cannot disappear, and that will never leave us—even after death.


A Different Retirement

       I’m not saying you should stop saving and investing for the future. There will most likely come a time when you will not be able to earn all the money necessary to cover your needs. It is prudent and wise to save for such a time, and the Bible commends and encourages such wisdom. But you should rethink your hopes of buying that second home, taking luxury cruises three times a year, or endless rounds of golf during retirement.

       A Christian can most definitely follow God’s teaching and will if they save up for retirement and reduce or eliminate their workload. But a Christian retirement should be focused on meeting your needs (not extravagant needs, but your daily bread—just enough) and then using your abundance of time to do God’s work. Minister to the needy, volunteer more, visit the sick and those in prison, comfort those in mourning, reach out to those on the margins of society, pray and study God’s Word—these are all wonderful activities to fill a Christian retirement. But seeking a permanent vacation, a time when you do little that is useful or glorifies God, is only a product of greed, selfishness, and the World—it is a tool used by Satan to distract you from furthering God’s kingdom. Flee from it, and seek God’s counsel for your older years. Ask Him to guide you and show you His ways so that you can continue to glorify Him.


The Results

       This new view of retirement has profound implications for your life—now and when you’re older.

  • You no longer need to be obsessed with saving and investing all of your money. You’re free to be extremely generous—following God’s teaching on giving. You won’t have to save as much, but you should still save prudently.
  • You will avoid the depression that often comes at retirement. Many workers realize they actually enjoyed the interaction with their coworkers or the public and feel lost after they retire.
  • You’re free to do work that you enjoy even though it may not pay well. You don’t have to run after the highest paying job just so you can secure the retirement you’re told to dream about.
  • You don’t need to be a workaholic. You can focus on family and serving God during your working years—glorifying God much more than if you spent 80+ hours a week working. This also leaves you with more time to develop your relationship with God.

       Seeking a retirement where you can glorify God even more than you did while you were working brings you much closer to God than a retirement where you spend every day out on the boat. I challenge you to reconsider your ideas about retirement. Rethink retirement, and pray for God to show you what His will is for the later years of your life. Let God transform and renew your mind—clearing out the messages the World and Satan have planted there and putting His teaching and will in your heart. Then plan and save for a retirement that glorifies God.

       Readers who know me personally may already be aware that I launched my financial planning firm in January but most of you probably aren’t. I didn’t announce it on here yet because I was busy with the trip to Haiti and a number of other things for a while. But I’ve finally launched a business website and I wanted to share it with you.

       The name of the business is Provident Planning, Inc. (just like this blog), and you can find out everything you might want to know about what I do and how I do it on Provident Planning’s business website (or you can click the green button at the top right of this page). Basically, I’m offering financial planning advice on a fee-only basis (hourly or flat fee). I also offer tax preparation at an hourly rate.

       I was trained as a financial planner and worked in wealth management before starting Provident Planning. But I was tired of only being able to serve the wealthy and not having the ability to fully incorporate my faith into my work. So I’ve set up Provident Planning so I can work with people from all backgrounds and can include faith discussions in my work.

       That’s the announcement to let you know I’ve officially launched my business. Now for the giveaway!

       In exchange for your feedback, I’m offering one hour of financial planning advice (a $100 value!!!) over the phone to one random winner. During the phone call, you’ll have the chance to ask me any questions you might have about personal finances. You won’t have to share any personal details (like SSN’s, account numbers, full name, etc.) if you don’t feel comfortable doing so. If you’re not sure what I can help with, then make sure you check out the “Services” page on Provident Planning’s business website. Here’s what you can do to enter:

  1. Visit Provident Planning’s business website. Then leave a useful comment on this post with a suggestion for improvement or a question you have about my business (that wasn’t answered on the FAQ page). – worth 3 entries
  2.  

  3. Tweet about this giveaway. Your tweet should say “Win a Chance for Free Financial Planning Advice by Giving Your Feedback on Provident Planning – http://bit.ly/aB8yQZ @providentplan” (link points to this post) – worth 2 entries



       You can only do each of those things once, but you can do both of them to get a total of 5 entries in this giveaway. Duplicate entries will not be counted (e.g., you leave more than one useful comment).

       All entries must be made by 5:00 P.M. Eastern Time on Monday, March 8, 2010. The winner will be chosen through a random drawing using the integer generator on random.org. I’ll update this post on Monday evening to announce the winner. The winner will also be contacted by e-mail to get their phone number and set up a time to talk, so be sure you use a valid e-mail address when you leave a comment. If the winner is via a Twitter entry, I’ll send a direct message to get your e-mail address. The winner must respond by 9:00 PM Eastern Time on Wednesday, March 10th, or I’ll select another winner. If you have any questions, let me know in the comments!

Is Money Evil?

Corey —  March 4, 2010 — 5 Comments

This article has been reprinted with permission from Gary Foreman of The Dollar Stretcher. You can find the original article here: Is Money Evil?

       Is it virtuous to be poor? Many people think so. Holiness is partly accomplished, in many religions, by turning your back on material things. To appreciate the spiritual, you need to give up the material, and many people have taken vows of poverty in pursuit of holiness.

       I don’t think it’s that simple. Money is just a tool. In other words, it’s just a way that we have of exchanging things. Money has no value on its own. What makes money good or bad is what people do with it. The problem is with the way money is used and not the money itself.

       ”For the love of money is a root of all kinds of evil,” found in 1 Timothy 6:10, is one of the most misquoted verses in the Bible. When you place your affection on money, you become vulnerable to troubles. The problem is not the mere fact that you have accumulated some wealth.

       So how can you maintain a right relationship to money? Is there a way to control money…instead of having money control you?

       First, we need to be careful not to fall in love with our money, or we will let money have too much influence in our lives. That also goes for the things that money can buy. We’re all aware that the things we care about tend to control us. The only way to avoid that control is to hold on to things loosely.

       Secondly, if you believe that money is bad, this thought process could sabotage your desire to build wealth. We’ll even push money away from us. Do you find it hard to do the things necessary to build a savings account or IRA? Always seem to pick the wrong investment? We can’t see our subconscious, but it can have a huge impact on us. Sometimes it even ruins our own plans.

       What do you think about money? Do you have a good relationship with it? Or is it time to reconsider what you believe?

________________

Gary Foreman is a former financial planner and purchasing manager who currently edits The Dollar Stretcher.com website and newsletters.

       Once you understand what an investment is, you can begin to learn about the different types of investments available. We’ll start by looking at the broadest types of investments first, and then later we’ll narrow it down by looking at more specific types of investments.

What Is a Security?

       There are two main types of investments – securities and property. We’re going to look at securities today.

       I’m sure you’ve read about the securities markets in the newspapers or heard about them on TV. But what does that mean exactly? A security is any kind of investment that represents debt, ownership, or the legal right to buy or sell a security.

       Bonds are an investment that represent debt. When you invest in a bond, you’re basically loaning money to the person who issued the bond.

       Stocks are investments that represent ownership. When you invest in a company’s stock, you are becoming an owner of that company.

       Finally, options are investments that represent a legal right to buy or sell a security. An option is basically a contract that you purchase to give you the right to buy or sell a certain amount of a security at a certain price for a certain amount of time (until the contract expires). The person who sells you the option is legally obligated to sell that security to you or buy that security from you at the specified price whenever you choose to use your rights.

       So when you hear someone talking about securities (or the securities market) they’re talking about stocks, bonds, and options. Securities would also include mutual funds, which are simply a portfolio (a collection) of securities. These are very basic things in the investment world, so it is important you understand what they mean.

       As I continue this series on investing basics, we’ll go into more depth about all of these types of investments so you’ll understand what they are and how they work. Make sure you sign up for free updates to Provident Planning if you want to learn more! You can also enter your email address below to get free updates in your email: (Don’t worry, I’ll never share nor sell your email address.)

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       This article is the third in a series on how to get out of debt. If you haven’t already, you should check out the previous articles:


Step 3 – Create a Budget & Stick to It

       I’ve said it a million times (OK, at least five times on here for sure) – you need to have and use a budget to achieve personal finance success! This is true whether we’re talking about paying off debt, saving for the future, planning for retirement, or becoming a generous giver. The budget is an essential tool for personal finance.

       But it’s especially true if you want to pay off your debt as quickly as possible! Knowing how much you spend will help you see where you can cut back and save the most money. Aiming for a specific amount in your budget will enable you make sure you have enough money left over every month to put extra payments toward your debt. If you don’t take the time to create a budget and stick to it, you’re putting a major hurdle in your path toward paying off your debt.

It Doesn’t Need to Be Complicated

       Now I want you to understand that budgeting is not complicated. It simply means writing down your income and expenses. It doesn’t matter how you do it – as long as it works for you. In fact, there are many ways to create a budget and track your spending. My favorite way right now is to use Mint. It’s easy, intuitive, and nearly automatic. You can have alerts sent to your email or phone when you approach certain thresholds in your budget (even for individual categories).

How to Get Started

       If you want to get started creating a budget but aren’t sure how (and you’re not going to use Mint or other software), then you’ll need to start tracking your expenses for three months. It’s not fun or exciting, but it will help you see exactly where your money is going every month. From there, you can build your budget and begin to set goals for how much you spend in each category every month.

Remember – It’s Only Temporary

       Finally, for those of you who hate the idea of a budget, I want you to remember that this isn’t forever. There will come a time when you won’t need to track every penny you spend. You will eventually gain control of your spending, have an emergency fund, and be paying all your bills on time. But to live without a budget, you must first live within one. Even after you’ve gained control of your situation, I think you’ll find that you’ll continue to keep updating your budget because it’s such a useful tool. If the idea of creating a budget and sticking to it drains all the joy out of your life, remember that it is only a temporary situation.

Get Free Updates!

       If you want to keep getting tips on how you can get out of debt and manage your personal finances well, make sure you sign up for free updates to Provident Planning! I’ll be continuing this series throughout the year while I also explore other aspects of personal finance.

       Let me know how you’re going to create a budget & stick to it in the comments below!

       8 Remove far from me falsehood and lies. Give me neither poverty nor riches. Feed me with the food that is needful for me; 9 lest I be full, deny you, and say, ‘Who is Yahweh?’ or lest I be poor, and steal, and so dishonor the name of my God.

Proverbs 30:8-9 (WEB)



       These two verses from Proverbs give us wonderful insight into our need for contentment and Jesus’ purpose behind praying for “our daily bread”. First, we see that contentment is important because it helps us to remember God in all things. When we become rich, we can easily be tempted to ask why we even need God’s help any more. We have our money – why do we need God?

       But it’s also equally interesting that we should be praying to have the food that is needful – just enough. If we are poor, we’ll be tempted to steal and that would dishonor God’s name. It would be a sin that would grieve Him. So we see that it’s not outside of God’s will for us to pray for our needs to be met.

       Jesus makes this point in His example for prayer:

       7 In praying, don’t use vain repetitions, as the Gentiles do; for they think that they will be heard for their much speaking. 8 Therefore don’t be like them, for your Father knows what things you need, before you ask him. 9 Pray like this: ‘Our Father in heaven, may your name be kept holy. 10 Let your Kingdom come. Let your will be done, as in heaven, so on earth. 11 Give us today our daily bread. 12 Forgive us our debts, as we also forgive our debtors. 13 Bring us not into temptation, but deliver us from the evil one. For yours is the Kingdom, the power, and the glory forever. Amen.’

Matthew 6:7-13 (WEB)



       Jesus teaches us that it’s important to remember God knows our needs before we even ask Him. But it is still appropriate for us to pray for our daily bread – the things we need to get through each day. Again, showing that we are seeking contentment and not personal, worldly riches. We are praying for just enough – not for things that far exceed our needs. But we’re also praying that our needs will be met so we won’t be tempted to steal and thus sin.

       This idea of daily bread also ties into the Israelites’ journey through the wilderness where God provided them with manna. The Israelites could only collect enough manna to feed themselves for one day. Anything extra would rot. They were in complete dependence upon God’s provision. That’s what we’re praying for when we ask God for our daily bread. We’re saying, “God, I need your provision. I know I can’t do this on my own, but I know you can meet my needs.”

       So the next time you’re praying, remember to praise God and thank Him for the blessings He’s provided. But don’t hesitate to ask Him to continue to meet your needs. Ask Him for your daily bread – for just enough. Don’t be lead away by the deceitfulness of riches and begin praying for wealth. Ask God to give you what you need so you can serve Him faithfully, according to His will. God will answer such a prayer given with the right motives.

       After 9 months and over 200 posts, Provident Planning has had 20,000 visitors! To celebrate, I’m giving away $20 in cash to you, my readers. Without you, I wouldn’t have gotten this far. Thank you so much!

       Since this isn’t a huge giveaway, I’m not going to make it difficult for you to enter. But I’d also like to get some feedback from you. So here’s what you can do to enter:

  1. Fill out the form at the end of this post. – 3 entries
  2.  

  3. Tweet about this giveaway. Your tweet should say “$20 Giveaway at Provident Planning – http://bit.ly/bZP14s @providentplan”. (The link points to this post.) – 2 entries
  4.  

  5. Include a link to this giveaway in a blog post. If your blog doesn’t send pings or trackbacks, make sure you email me (paul@providentplan.com) with a link to your post so it will get counted. – 3 entries



       You can only do each of those things once, but you can do all three of them to get a total of 8 entries in this giveaway. Duplicate entries will not be counted (e.g., you fill out the feedback form below more than once).

       All entries must be made by 5:00 P.M. Eastern Time on Monday, March 1, 2010. The winner will be chosen through a random drawing using the integer generator on random.org. I’ll update this post on Monday evening to announce the winner. The winner will also be contacted by e-mail to receive the $20 cash via PayPal, so be sure you use a valid e-mail address in the form below. If the winner is via a Twitter entry, I’ll send a direct message to get your e-mail address. The winner must respond by 9:00 PM Eastern Time on Wednesday, March 3rd, or I’ll select another winner. If you have any questions, let me know in the comments!

And the Winner Is…

       With only three entries, everyone’s odds of winning were quite good. But congratulations are due to Donna! She won the random drawing, so I’ll be emailing her to confirm. If she doesn’t reply by 9:00 PM EST on Wednesday, March 3rd, then I’ll select another winner through a random drawing. Thanks to everyone who participated (all three of you!), and make sure you enter the next giveaway. If I keep getting so few entries, you have great chances to win!!! :-P