Last week I met with a new prospective client. He's in his mid-50's and feels like it's time for him to retire. He had run the numbers and, I agreed, seemed to be in a good financial position. He had enough saved up in his 401(k), his company was providing excellent retiree health benefits, he had no debt other than a very small mortgage and Social Security would cover the vast majority of his monthly expenses. Financially speaking, he was all set.
He told me he had already interviewed 12-15 other advisors but just hadn't found the right fit yet. I knew some of the other firms he had interviewed, several of which enjoy great reputations. No doubt they would do a fine job investing his retirement money for him.
And, yet, he still wasn't retired and still hadn't hired an advisor. I couldn't help but ask a series of "Why?" questions. Why retire? Why now? What will you do? Where will you be? I don't think many other advisors bothered to ask him these questions.
Retirement is a major life transition and people are understandably cautious, maybe even a little scared. Once you stop working and that paycheck isn't coming in any more, it's now on you to make the money last. And if something goes wrong, it's difficult to return to full-time work at your old salary in order to fill in the gap. How to generate a sustainable lifetime income is a daunting task. And it can be even harder to know who to trust for financial advice.
But aside from the admittedly challenging financial issues that arise at retirement, I find the more important issues go far beyond money. Being comfortable with who we are and our place in the world can mean the difference between a truly meaningful retirement and a mere existence.
If you're thinking of retirement, don't just stop at the financial questions. Dig deeper and seek answers to questions of true meaning. Start with these 5 questions:
Are you retiring to something or from something?
What's really driving this decision at this time? Is this part of a long-planned for transition, or has this suddenly been thrust upon you by a change outside your control? It's OK to say you need more time to digest all of this.
How will you use your time?
For the past 30+ years you've had obligations. Marriage, children, work, clubs, organizations, places of worship, etc. Your time was often spoken for. Now what? Do you really know what you're passionate about?
Money is just a tool; how will you use it?
They say money doesn't change you, it simply reveals who you are. Now you have both time and money on your hands. Are you scared yet?
Who are the important people in your life?
If retirement means spending time with kids and grandkids, great. If it's hanging with friends, great. If it's making new friends via a new hobby, great. If it's work friends, be prepared to work hard at remaining included. These are all perfectly good answers. Just make sure you know what the right answers are for you. And you'd better be darned sure that you and your spouse are on the same page about this whole retirement thing.
What will your legacy be?
How will you combine your time, money, talents and values to shape those people and places who shaped you? What lessons and values do you want to demonstrate to those who come after you?
Retirement can be the most rewarding phase in one's life. Many of our clients are enjoying amazing new adventures and relationships, even as they approach nearly 30 years of retired life. The best time to think about these questions is long before a looming retirement decision. Make sure you carve out time to consider what really matters to you, and then structure your retirement to leverage your newfound freedoms.
