What to Consider Before Retiring

Retirement planning is a big aspect of financial planning. However, the job of a financial advisor extends beyond assessing and managing a client’s assets. It is ensuring clients are happy and maintain the lifestyle they wish to live throughout retirement. Doing so, requires some mental and emotional preparation for retirement. Here are four myths to consider before your retirement:

1) The decision to retire is easy— No, it is not always easy. You are deciding to stop doing what you may have done for many years. Your work in many ways has defined who you were.  Oftentimes, my clients have been dreaming and striving to “climb the corporate ladder” all their life, with little thought about what they would do once they are done with that climb. I have been known to equate it to a death in the family. It can be a blessing to be relieved of stress and travel, but ambition, the need to climb higher, and work towards something is often not easy to leave behind.

2) Retirement means I now have nothing to do— Well yes, but what people find in many cases is that doing nothing is not as easy as it may sound. To me, retirement is doing what you want to do, when you want to do it, and only if you want to do it.  Regardless, in retirement you must be “doing” something. I have experienced many clients who are back in my office after 2 to 3 years of retirement saying “they are going nuts; my wife and I traveled and saw everything we wanted to see and it didn’t take us 25 years.” These are just a few comments I have heard and why I often advise clients to develop a plan for retirement. Know what you want to do. Envision how you want a typical day to be spent. Try to be realistic about the time it will take you to accomplish what you want to do and achieve in retirement.

3) Retirement is a financial decision— Yes, in many ways it is, but as items 1) and 2) indicate, it is much more than that. I have often made the comment that retirement is twice the husband and half the money. Some laugh, but in reality, spouses are not used to all the time they start spending together in retirement and now may have to watch their spending a little closer than while working. The financial question can often be answered with the help of a financial advisor, yet it is only part of the decision process. I had a client who was totally disgusted with his work, and for five years I showed him he had plenty of funds to retire, yet it took him the five years to finally walk away.

4) We have plenty of time now to do the things we have always wanted to do— Well, maybe, but maybe not. I have observed over the years how my clients lifestyles change with age, and I offer this advice…do what you want to do in your 60’s and 70’s (if not before) because you most likely won’t be doing it in your 80’s. Not because you won’t have the money, but because you are 80!

The information provided here is for general information and educational purposes only and should not be considered an individualized recommendation or personalized investment advice. Each person’s situation will be different, please speak to a financial advisor about your individual situation before taking any actions.