The financial service industry is so concerned with managing your money, they often forget that there are more steps in the process of financial planning and investment management — income preservation and decumulation. Many financial advisors only plan for the accumulation stage and overlook the important preservation stage and decumulation stage. However, these two stages deserve much more attention because it is not just a “set it and forget it” model. We often associate retirement as the finale of the ride, and everything afterward is just a slow downhill coast. In actuality, the retirement stage is the best ride of all!
The preservation stage starts before you declare your retirement. This is where your planning takes on a unique twist. You are not just concerned with the accumulation of assets, but establishing a method to convert your assets to a steady stream of income. Of course, I am a vigorous advocate of beginning your investment journey by considering the cash flow the investment will produce and not just investing for some unknown event in the future. However, if you have not started your cash flow journey, the preservation stage is where you take a hard look at your assets and liabilities and decide on the type of life you desire to achieve.
The decumulation stage starts when you set in place your final retirement plan. You are still concerned with the preservation of assets or the cash flow it generates, but now you are living out your plan. You may need to supplement your pension and social security income with a lifetime annuity and/or start taking your dividends instead of rolling them over into more stocks. If you just need cash periodically, then a systematic withdrawal of your IRA or traditional investment account may be necessary. The retirement phase is also the time to consider working on an estate plan by establishing a trust and making other important decisions like healthcare directives and power of attorney.
In the Old Testament, in the Bible, we discover histories of men chasing money, power, and recognition. These Old Testament stories remind us of how vain it is to follow the secular worldview of success. There is no narrative more recognized than the life of King Solomon. In the beginning, King Solomon did not ask God for power, riches, or recognition. He only asked God for wisdom. Because he did not ask for these worldly items, God gave him wisdom and all the riches in the world.
9 Therefore give to Your servant an understanding heart to judge Your people, that I may discern between good and evil. For who is able to judge this great people of Yours?
10 The speech pleased the Lord, that Solomon had asked this thing. 11 Then God said to him: “Because you have asked this thing, and have not asked long life for yourself, nor have asked riches for yourself, nor have asked the life of your enemies, but have asked for yourself understanding to discern justice, 12 behold, I have done according to your words; see, I have given you a wise and understanding heart, so that there has not been anyone like you before you, nor shall any like you arise after you. 13 And I have also given you what you have not asked: both riches and honor, so that there shall not be anyone like you among the kings all your days. 14 So if you walk in My ways, to keep My statutes and My commandments, as your father David walked, then I will lengthen your days.” (1Kings 3: 9–14 NKJV)
Unfortunately, King Solomon later fell from God’s heart by turning from the Lord. He accepted other gods and rituals to satisfy the people and his desires. King Solomon indulged in the pleasures of the physical world that later depressed him and robbed him of the true joys of life.
I recently read a book by a Brazilian author; Augusto Cury called “The Dreamseller the Calling”. In the book, the unique character of the Dreamseller prevents a suicide attempt by the main character by selling him a comma. The Dreamseller tells the man his story is not complete. Therefore, he will only sell him a comma, not a period (Cury, 2014). This is undoubtedly one of the most interesting books I read all year. I highly recommend it to my clients during their financial planning phase. It will certainly make you recognize what is truly important in your life.
Retirement is just a comma, not a period. Our lives are not finished because we call ourselves retired. Our story is not complete — there is much more living to be shared. Sure, we may want to slow our pace down, but we are now in the position to appreciate life and all its wonders. For instance, grandchildren are the 9th wonder of the world! Coincidently, what is the 8th wonder of the world?
“Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.”
We all can achieve financial prosperity if we will forget the notion that it takes a certain sum of money to retire comfortably. We have a choice to decide how we want to live our lives without all the secular noise about discovering our number!
“Let’s just remove the word retirement from our vocabulary. Then, our stress level becomes null because we no longer worry about conforming to some mythical retirement idealism” (House 2022)
Retirement is just a comma, not a period. Enjoy the rest of your story.
Your faithful servant
Cury, A. (2014). The Dreamseller: The calling. Thorpe.
House, G. (2022). Investing in a secular world; discovering biblical truths about money. Christian Faith Publishing.
The Holy Bible: NKJV New King James Version. (2016). Nashville, Tennessee: Holman Bible.