To some extent, wishing you had what someone else already has is a natural human instinct. But for most people, the brain is pretty good at dealing with “envy”. If I drive a Toyota Camry (which I do) and I see another 58 year old man driving around in a Lamborghini, I don’t immediately think, “Wow, I wish I was that guy driving that car!” Instead, I think, “Wow, that poor guy is having a mid life crisis, his family life must suck, he’s a show off, and last time I checked, Rockville Pike isn’t exactly the autobahn!”
When it comes to money, envy can be a very dangerous emotion. But if you’re reading this, you already know that. You’re looking for retirement planning tips.
And you know that happiness is not derived from excess, but simply from having the means to continue to live the life you have always lived. Obviously, the older, and hopefully wiser, we all get, the more pronounced this feeling becomes.
Being a native of the DC Metro area, I’ve noticed a type of financial envy that starts around the age of 60 and becomes more pronounced the closer people get to retirement. I hear it from physicians, attorneys, small business owners, corporate executives and salespeople of all sorts. These are big earners, with household incomes well over $200,000 a year. Their friends work for the Federal government, and many of them have never had a household income that has ever come close to that level. So why are these millionaires jealous of their Fed friends?
The reason is quite simple. Federal workers have a pension that will pay them for the rest of their lives. And without getting into the specifics, their pension plus their Social Security checks usually cover all of their monthly bills in retirement. They’ve also been saving money for years in the Fed’s version of a 401k called the TSP (Thrift Savings Plan).
So no matter what happens in the stock market, people with a good pension don’t have to panic. The “Holy Grail” in retirement is not material wealth. It’s the financial freedom to live your normal lifestyle without the emotional burden of wondering if you”ll run out of money. And yes, that is something to be envious of.
At Capitol Retirement Strategies, our very first job with every new client is to focus on securing their monthly income. For those of you whose only guaranteed payments are, or will be, a Social Security check, this is the most important service that we offer.