How often do you think about your retirement? And when you do, what is it that concerns you most? If it’s the money, then you’re not alone because you’re about to find out there’s a lot more to a successful retirement than the money. Mike Drak is the author of the books, Retirement Heaven or Hell and Victory Lap Retirement. Mike joins me this week to share a story on how he found himself in a place he calls, retirement hell, and how he managed to escape.

 

Welcome to the Maple Money Show, the podcast that helps Canadians improve their personal finances to create lasting financial freedom. Did you know that 57 percent of Canadian adults don’t have a will? Willful has made it more affordable, convenient and easy for Canadians to create a legal will and power of attorney documents online from the comfort of home. In less than 20 minutes, and for a fraction of the price of visiting a lawyer, you can gain peace of mind knowing you have a plan in place to protect your children, pets and loved ones in the event of an emergency. Get started for free at maplemoney.com/willful and use promo code Maple Money to save 15 percent. Now, let’s chat with Mike…

 

Tom: Hi, Mike. Welcome to the Maple Money Show.

 

Mike: It’s nice to be here, Tom.

 

Tom: I noticed you had a new book out and I wanted to reach out to you because it’s something that we’ve touched on a few times on the podcast, almost accidentally. It’s this view of retirement and what people should actually be considering. Not just this dream of retiring early and travelling all the time because it’s just not sustainable. It’s not realistic. My friend Jimmy calls it “retirement porn,” this idea that you’re just going to travel all year round. And in reality, it never seems to turn out that way. Just to set us up a little, can you tell us the title of the book and why you wrote it?

 

Mike: I wrote the book because I failed miserably at retirement in the beginning. I was naive. I believed what the financial services industry was saying which was, the more money you have, the better your retirement would be. If you had a lot of money it would be a no brainer. Your life would be fantastic. I found out that was all wrong. I was led to believe that retirement would solve all my problems. And that was wrong because I still had the same problems the day after I retired. What drove me crazy was the advertisers. They’ve been showing us the same retirement commercials for the last 50 years. The only difference being in their messaging is instead of black and white, they’re now in color. But it’s the same pictures. It’s the same models of people sitting on the beach watching the sun go down, people golfing by the seashore, or people on a yacht sailing the Caribbean. But real retirement isn’t like that. It’s not even close. Who is going to spend 365 days on the beach? It’s all kind of fake. I woke up to it and said, “You know, there has to be a better way.” And because of my failure and the mistakes I made, I ended up in the place I refer to as, retirement hell. It’s not a fun place to be. I suffered from retirement shock for a period of time and it was just a terrible thing. It’s almost equivalent to the pandemic where you’re stuck at home, you’re lost. You don’t know what to do and you start feeling sorry for yourself. You don’t feel like doing anything. You’re just miserable. It lasts a long time until you figure things out. Part of the reason for writing the book was I wanted to help people avoid ending up in retirement hell like I did and avoid a lot of the stress I encountered.

 

Tom: We have a lot of people listening to the show that are quite into the FIRE movement, the FIRE community. I mentioned before, I’ve had someone on the podcast, Eric Chang, who is a local guy. He did the whole retire early thing and got bored fast. It sounds like that’s what you’re saying. And being a younger guy who was still easily able to work, he ended up doing that. He started his own businesses and just realized that retirement isn’t just sitting around watching TV or traveling. You still need some kind of purpose.

 

Mike: Well, that’s the problem I have with the FIRE community. I believe in FIRE except for the “RE” part. I know a lot of people that achieved FIRE early, but they’re all working. There’s not one of them that isn’t because they need to find something to do, something that gives them a sense of accomplishment, challenge and things like that, or they’re just going to be bored out of their minds. And that’s what they’re finding once they actually achieve FIRE. But it’s funny because some of them don’t want to admit it. They’ll pretend they’re not working but they just wrote a book or are running a blog or whatever and they’re trying to monetize it. They’re doing something so why be embarrassed? Why not just say, “Hey, FIRE gave me the freedom to go on and do something else, something more interesting, something that I always wanted to do, and I figured that out.”

 

Tom: I think beyond being embarrassed or thinking it ruins credibility or whatever, I think they should embrace it. I often preach about multiple income streams. Whether you’ve retired early or still working, you’re always best off to have as many “irons in the fire” that can keep you sustained so maybe you don’t need to save up as much to retire. Just to not have to save up as much so that you can have some form real retirement. You don’t have to have this nest egg that’s going to last you until you’re dead. You can kind of keep something going in the meantime.

 

Mike: No, I totally agree with you. A lot of people aren’t aware that there’s a lot of benefits attached to working part-time in retirement. Generating another source of active income is just one of them. Working in retirement helps you meet your socialization need. We all have that need and we found that out during the pandemic—what it feels like to be isolated, alone, all by yourself. It helps keep your mind sharp. You’ve got to solve problems, it’s challenging. You’re interacting with customers and whatnot. It keeps you healthy. There are so many other benefits attached to it. That’s what I’m trying to point out to people. Don’t write it off as a bad thing just because you don’t like the job you’re doing now. But I love financial independence. I’m teaching my kids about it and I’m saying forget about retirement. This should be your goal out of the gate once you start working. Work on getting there. And once you get there, use it as a stepping stone to something better.

 

Tom: When you mentioned freedom. I found early on, just by having other things going on with the blog while I still had a corporate career, I felt a sense of freedom even then. I’m not retired but just to know that you have a “plan B” that could work out. Or, to keep it more general, maybe someone just wants to make an extra $500 or $1,000 a month driving for Uber (and all these other options that are out there). It’s something where you can get some savings at first, but it also gives you the sense of protection. I actually enjoyed my career more once I didn’t feel like I needed it so much.

 

Mike: That’s right. You weren’t scared of losing it so much, right?

 

Tom: Yeah, I could voice my opinion more and I actually became a better employee because of that. I didn’t have to do the “yes” man thing. I could feel like I was just an active part of it and I didn’t need to say what was needed to be said to keep my job.

 

Mike: And that’s so very powerful, to be authentic. Especially, working in a corporation or something like that. For the longest time, I followed the rules and acted the way they wanted me to act and spoke the way they wanted me to speak because I was scared of losing my job especially when you have a family, a mortgage and everything else. But once you get fired, it’s a game changer. You’re not scared anymore, you can finally speak up and be more of the real you. That’s so empowering. It’s such a beautiful thing.

 

Tom: I wanted to go back to your retirement. You mentioned being in retirement hell. When did that creep in on you? I assume “day one” of retirement probably felt pretty good. How did that timeline look?

 

Mike: I was packaged off from my 36 year banking job, and it just kind of came out of the blue because I was a very good employee. I got great performance reports. But, for whatever reason, they decided that maybe I hit a number and it was time for me to go. I was thinking of leaving anyways because I wasn’t enjoying the job anymore. I was stressed out by it. I kept trying to win the performance awards on an annual basis and things like that. I didn’t like some of the people there anymore. And some of the things that they were doing, the leadership kind of changed. So I received this severance check at age 59 and it was like I hit the lottery. They gave me a paycheck and I was going to leave anyways without it. I was on cloud nine until the Monday morning hit—the following Monday morning. That’s when everything fell apart for me. I was sitting at home by myself. My wife had gone to work because she was still working. I couldn’t hang out with my friends because they were all still working. I missed the phone calls I used to get. And I missed the emails and things like that I would get from employees or customers. Everything was so quiet and I didn’t know what to do. The most frustrating thing was that no one could understand what I was going through. Even my wife and she’s pretty sharp. She’s an investment adviser. She couldn’t understand. My friends couldn’t understand because they all said, “How can Mike be unhappy? He doesn’t have to work anymore.” But the truth is, the reason I was unhappy was because I didn’t work anymore. That’s what was driving me crazy. I had a hard time with it because when you’re in retirement hell, all you have is negative thoughts. You don’t feel like doing anything. The smallest thing seems like such a painful thing that you don’t want to do, like cutting the lawn or going and picking up the mail. It was the funniest thing. And things you loved to do before, I didn’t feel like doing more, like going fishing or golfing or riding my bike. I used to love doing that. I just wanted to sit on the couch and moan because it’s like you’re lost in this fog. Nothing makes sense anymore. And there’s no one to talk to that understands what you’re going through. That feeling stayed with me for a period of time. But, thankfully, I figured it out for myself.

 

Tom: I’m surprised it was that quick. I thought you were going to say it was 6 months or a year before it started to go downhill but it was immediate for you.

 

Mike: You know, it’s different for people that have a planned exit to say, “Okay, I want to leave in 6 months and I’m getting ready for it mentally.” They’ll go and enjoy it for a period of time. Like life is good. They don’t have to get up in the morning anymore or set alarm clocks. They don’t have to go through that commute to work. They don’t have to answer to a boss any more. Life is really good. But some types of retirees—not all of them, but the ones that I call “growth oriented” retirees—people that need a goal and a sense of accomplishment, things that their work used to give them. The other type are transcenders, retirees whose need is to find a way of giving back to the community or helping people. If they can’t find a way of meeting those needs in retirement, they’re going to start thinking something’s missing. They’re going to start feeling that, and that’s when they’ll slide into retirement. And they’ll be there with me. I was on the fast path. But eventually they’ll get there unless they can find a way to fill in that big hole that was left behind when they left their full-time employment.

 

Tom: What was your next step then? You realized this rather quickly. How long did that last until you found that next step? And what was it?

 

Mike: It lasted for at least 9 months, I would think. I knew I was in trouble because my father suffered from it for about a year and I had a good friend die from it. He died from overdrinking because of all the frustration and boredom. I knew it was a problem, a big problem. I started using a journal and I was writing down my thoughts, like, “Okay, what can I do to get me out of this thing? What will make me happy? Why am I not doing these happy things? What do I need in my life? How can I get an identity back? How can I put structure in my days? And what do I need to fix?” As I was working on this journal, I started to figure things out. I was doing a lot of research too. I was looking for successful retirement role models. I connected with them and I started to put the puzzle together and I came up with these 9 retirement principles that I knew if I followed, they would deliver me a great retirement. I started following these principles and life’s never been better. That’s what got me out of retirement but the big thing was finding an alternative source of purpose. Because my work used to be my primary purpose. It’s what got me to pay down my mortgage and give financial support for my kids and get them through school and things like that. When I no longer had that purpose—when the job was gone, there was a big hole and I had to find a good way of filling that gap. And I was able to do it.

 

Tom: We mentioned one of the sources of purpose is having that part-time job. Yes, it’s income, but it’s also some social interaction. What other source of purpose did you find? Was it your family and friends? What did you reach out to, to find purpose?

 

Mike: Okay, this is one I knew from the principles of what I needed to do. And it’s not just to find purpose, but really thinking in terms of longevity and happiness. These are things I knew I needed to do to achieve that. The overriding theme (that I always have to remind myself of) is happy people live longer. It’s been proven. It’s funny that they proved that through a nun study. Happy nuns live longer. It always kind of makes me smile when I think about it. Then I started looking at it and said, “Okay, one of the important things is the strength of the relationships I have with my family and friends,” because it’s been proven that strong relationships can reduce mortality risk up to 45 percent, which is just unbelievable. And so I said, “Do I need to do some work here?” And the answer was yes, because I was so consumed with my job when I was working full-time, I needed to do some repair work and focus on that. That was an important thing. Another thing was my health. I woke up to the fact that my health wasn’t that good. I was overweight. I was bordering on obese. And we saw what would happen to unhealthy people during the pandemic. Those are the ones who have underlying illnesses that would end up on a ventilator. And I said, “No, I’ve got to go and correct this.” Luckily, I found out that these things are correctable. They’re reversible through positive lifestyle change so I started focusing on that. Right now, I’m working out more on a regular basis, eating better foods and things like that. That gave me a little bit of structure in my day because I work out almost every day now. It’s one of my top priorities. Another thing I learned to focus on was finding different ways of fulfilling my need for socialization. I do that through tribes. It’s a simple principle. I joined tribes. I joined Toastmasters to learn how to do public speaking. I joined this swimming tribe. We meet 3 days a week at the community pool and I joined a bike tribe. So every Sunday we go for a couple hours and ride. After that we sit down to have a coffee and talk about life. And the great thing about these tribes are, there’s a mix. There are male and female. They’re young and old. On the bike tribe the youngest I think in the 20s, and the oldest is just north of 80. But we all sit down and share life experiences. We serve as mentors for each other. I had so much fun meeting these different groups of people, but that’s what everyone needs in their life. You cannot be isolated in life. The  biggest thing at the end was finding purpose. That was important because I don’t care how much money you have, you need a source of purpose or you’re not going to be happy. That was something I said I had to find the source of. I worked on that and luckily I was able to do that .

 

Tom: When you mentioned improving your health that does seem like a big one in retirement. I know people in my family where someone in their mid-80s is a very active golfer and then someone in their late 70s has lots of health conditions. And despite being older, someone with better health is getting so much more out of their retirement time. I think that’s something people need to consider quite a bit, because you look at these bank ads of people traveling and stuff, they’re not unhealthy people. 

 

Mike: But they’re models, too. They’re not real people either. What I found though—and this really opened my eyes, when I joined my swimming tribe, I saw a lady celebrate her 80th birthday by swimming 2,000 meters nonstop. I was in shock. I said, “No, that’s not supposed to be possible,” and she did it. And I know another 80-year-old that’s doing Ironman, which is just crazy when I think about it. But this person, because they adopted this healthy lifestyle and have carried it through their retirement, the odds are he’s going to get it done. I look at these things and think, we never see commercials about stuff like that—about what’s possible. And you’re right, if you don’t have your health, it doesn’t matter how much money you have because you’re not going to be able to spend it if you’re stuck lying on the couch, moaning in pain every day. And yet, that’s the fate of many people because they’re not aware of how important it is to maintain your health.

 

Tom: Yeah, I know people with poor health that don’t even want to travel out of the country because of insurance issues. And sure, as a perfect example of what you said, even if you have the money to do things like travel, if you don’t have the health, it may not work out for you. You may not be able to easily leave the country because you’re worried about travel insurance and things like that.

 

Mike: That’s right. And another thing, too, is if you’re planning to work during retirement, you’re not going to be able to if you’re not healthy enough to do it. These are things you have to think of beforehand and say, “Where am I short? Where do I need to improve and start working on those things?”

 

Tom: So what does someone do to figure this out? Say they’re looking to plan their retirement, whether it’s 6 months from now or a decade from now. How do they take stock of what they value, where they’re at now with things like health and money and everything? What’s the game plan to go from where they are now to a successful retirement?

 

Mike: What we’re trying to do is get to people 3 to 5 years before they retire. I work with my wife. She’s an investment adviser and I help her clients transition to retirement. In the initial meeting, my first question is, “Give me your big vision for retirement,” and I wait. I look at them and they have those eyes like a “deer in the headlights” look because they have no idea. They’ve been working so hard, saving this big pile of cash for retirement, but they have no idea what they’re going to spend it on. What I do then is laugh because I was in the same position. I didn’t have a clue either. I give them copies of both my books and tell them to go home and read the books. Then when they come back to the second meeting, you see the change because they’re excited and they’re full of all kinds of ideas and they’re saying, “Hey, maybe this is what we want to do. We’ve been thinking about this a lot.” And if it’s a couple, they’re all excited because now they’re talking. We start to design out their ideal lifestyle based on input from them. And we come up with three different scenarios. Then we test them out to see if they would actually work in terms of whether they’ll enjoy them; is it practical, does it make sense or is it just a dream that will never happen? And we’ll settle up on the ideal one for them—the optimal lifestyle. And this is the most important step—we actually cost out that lifestyle down to the penny. Maybe you want to travel a little bit. Maybe you want to go to the gym a couple of times a week. Maybe you want to go out for dinner or whatever—we actually cost all that out and come up with a number. And this is rare for people to do. You come up with the number, you go back to your adviser (if you have one) and say, “Here, I’m going to pull the number $60,000 after taxes to make it work.” And then you ask the adviser, “Do I have it?” The adviser is so happy because finally they have a number—an actual number that they can work with. So they plug it into the computer and the answer comes back. And if the adviser can say, “Yes, you have enough,” you should see their eyes light up because it’s the first time they’ve heard that and understand what it means, that they can actually finance the type of lifestyle they enjoy and really love doing. It changes their life completely. Because, if you can’t do that, you’ll always default to feeling that you need you don’t have enough, you need a little bit more, and that keeps you up at night. But when you know you have enough, it changes everything. So these people get so excited because they might say, “Okay, I’m going to work two more years and then I’m going to retire,” but they have something to retire to because (instead of wasting a lot of time like I did going through retirement hell, being frustrated trying to figure things out) at that point, they can hit the ground running and start enjoying life right away. You don’t want to waste prime retirement time, which a lot of people unfortunately did during the pandemic when they were pinned down. You want to take advantage of it. It’s something that you’re excited about because it’s something to look forward to saying, “Hey, in two years I’m going to be doing this and it’s really neat…” Versus other people that are still kind of struggling with it, drifting and assuming retirement is going to be wonderful. Unfortunately, they’ll find out it’s more complicated than that.

 

Tom: Speaking of being complicated, how often do you and your wife find that someone’s way off the mark? Whether they don’t have enough money or don’t have that sense of purpose and everything else we talked about including what they’re going to do with their time. I see these two buckets; you’ve got to know what you’re doing with your money and you’ve got to know what you’re doing with your time.

 

Mike: Yeah. And they’re equally important. Unfortunately, the vast majority have a lot of work to do. Even though some people have a lot of money, they don’t know what the money’s for. And there’s a lot of non-financial issues they have to deal with and consider. That’s part of the 9 principles. They really have to sit back and think these things through. A lot of people wake up when we do the cost analysis and say, “Wow! I’m short. I’ll never get there,” but that’s when we sit down and say, “Now you know what cards you’re holding for the first time. Let’s see if we can tweak it a little bit. Maybe we can cut some expenses out or add a source of active income like part-time work.” Then they understand how everything fits together. Just knowing exactly what position you’re in is very helpful for everyone because it gives us a good starting point to really do some serious work. I’m disappointed because not very many people have a good handle on it and they’re going to end up struggling.

 

Tom: You mentioned your wife’s in the business and she was a little shocked by how your retirement turned out. It made me think, when these banks put up these ads, sure, they work. It’s good marketing. But I’m also wondering if it’s not so much that they’re purposely being deceitful, it’s that none of them have gone through retirement. If you’re actively working—

 

Mike: No, they haven’t. That’s a good point.  

 

Tom: Your wife was legitimately surprised and you are her focus. It’s not about getting a client or anything like that. It just seems that maybe a lot of the industry doesn’t even realize it. They’re just so focused on just the math of the dollars and not the other half of it.

 

Mike: You’re so correct on that. The focus is on money and the focus is on accumulating as much money as possible. They really believe that will solve everything and it doesn’t. The actual people that have gone through the process, are coming back saying, “Guess what? I have a lot of problems and none of them have to do with money.” That’s what we’re trying to get the investment advisers to start listening to and say, “Hey, there’s this whole other side that has to be taken care of.” So, if you want to add good value to the relationship, you have to sit down and address these issues with your clients. But first, you have to be aware of them yourself. This is the point you made. It’s so important because none of them have been through retirement. It can be really tough on people.

 

Tom: I’ve used this example before but I think the guy retiring that’s interested in tools and works at a Home Depot part-time to have that social interaction and make a little extra money, I really think these part-time jobs are the perfect patch for all of this. Just to give you that buffer. Because you can check your numbers and feel pretty confident but if you’re earning a little extra money and getting that social interaction, it just feels like a few hours of a part-time job can smooth over a lot of those issues.

 

Mike: In some cases, people just want to do volunteer work, but it serves the same need. These are basic needs we all have. But like I said before, not all retirees will have them. The comfort oriented ones, they’re just happy to retire because they’re biggest goal in life was hitting the retirement finish line. And now they just want to enjoy simple life. There’s nothing wrong with that because that works for them. It just won’t work for people like me. We need more. We need to find the different purposes that will deliver that to us. One of the most important things that people don’t talk about is because of increasing longevity, the numbers don’t work anymore. And because of that, you’re seeing these new hybrid forms of retirement being developed all the time. Many of them contain a work component because they have to. Unless you’re willing to suffer a great decline in your lifestyle, which isn’t a lot of fun. Try to live off CPP and OAS—you’re not going to have a lot of fun. And you’re going to do that for 30 years? I don’t think so. We need more talk about this to say, “Living long is a good thing but enjoy your lifestyle at the same time or it’s not going to be fun.”

 

Tom: And that’s a great point, too, about the increased longevity. When you’re trying to decide if you need to work another year or two, it’s hard to make that decision when you’re not sure if you’re going to live to 80 or 100. It’s tough math to feel really confident about that right now.

 

Mike: Well, you can. What happens is if in 10 years they develop some magic pill that’s going to give you another 10 or 20 years, you’re going to say, “Oh, my God, I’ve got another problem… how am I going to pay for it?” You don’t want to be thinking about things like that. So, yeah, I’m a big promoter of working part-time in retirement. It gives you a safety margin, as Benjamin Graham always talks about. You can get by. You don’t have to worry about things. You don’t want to be stressed in retirement. And that’s a great way of reducing stress levels, right?

 

Tom: Yeah. Before we go, is there anything else we didn’t touch on that you think people need to know about planning for their retirement?

 

Mike: I think it’s just important to know that they have to consider all the variables. It’s both financial and non-financial. They’re just as important because I’ve seen more retirements fail because of non-financial reasons than financial. And that’s the truth of the matter. It’s important to get educated, to start looking into these things. And I just want to say one more thing, because I usually do a poll when I give a seminar, and I found out that if most people in the seminar are near-retirees and I ask what’s their biggest concern, it will always have to do with money. It’s a given. But if I have a seminar with a bunch of recent retirees and use the same questions, the concern is about finding purpose in retirement. Very rarely will they talk about money. To me, that’s an eye-opener. And we don’t talk about that. We just keep talking about money and we have to change our ways.

 

Tom: That’s great. Can you let people know where they can find you online and tell them about the book as well?

 

Mike: The books are available on Amazon; Victory Lap Retirement, and Retirement—Heaven or Hell. I also do a lot of blog writing at boomingencore.com. It’s a great website that has all kinds of information about retirement and retirement issues. That’s kind of like my playing ground, so to speak.

 

Tom: Great, thanks for being on the show.

 

Mike: My pleasure, Tom. It was great talking to you today.

 

Thank you, Mike, for sharing your story and pointing out that successful retirement requires a lot more than money. You can find the show notes for this episode at maplemoney.com/157. I want to take a moment to thank you for listening to the Maple Money Show. I appreciate your support in helping us continue to grow. If you have the Apple podcast app on your phone, can you pull up Maple Money Show and give it a quick rating? Even better, leave a review and let everyone know what you think of the show. Thanks for listening. I’m planning some great guests over the summer and, as always, I look forward to seeing you back here next week.