Category Archives: Retirement Planning

Retirement Planning: More Than Just Numbers

If you are like many people that are finishing up their last few weeks, months, or year of work; chances are you have a lot on your mind as the first day of retirement approaches. How do you feel? Are you excited? Anxious? Worried? What thoughts are swirling around in your mind? Are you thinking about freedom and relaxation, or are you unsure what you will do with yourself when the day comes and you no longer have to wake up at 5 AM to get ready for work? Regardless of how you feel or what you’re thinking about, you are not alone.

We hear stories from retirees each day about what their step into retirement looked like. For some, retirement fits like a glove. It’s as if retirement is a long lost friend with whom they have just reunited.

For others, they had big plans for all of the things they were going to do to keep them busy. They were going to golf every day, lounge by the pool, or spend time in the garden. Once they realized they couldn’t or didn’t want to do these activities every day, it was difficult finding new things to fill up their free time.

Still, there are others who never thought about retirement until they walked out the door on their last day of work. Many of them managed to figure out how to fill their time, but some couldn’t quite come to terms with being retired and decided to rejoin the workforce.

From what we have gathered, each of these three experiences correlates with how much planning the individual had completed prior to retirement. Those that truly thought through what they wanted to achieve during retirement had the least amount of difficulty transitioning. Those that never considered what retirement would be like had the most stress and anxiety as they made their way.

So, what can you do to prepare and ensure you have a smooth transition into retirement? There are many things to consider, but here are some ideas to get you started.

  1. Ask yourself what you will do with this newly found “free time.” After you come up with some ideas, ask yourself what you will do if and when those things aren’t enough to keep you busy. From what we hear, it happens quite often.
  2. Think about the people you normally spend time with during the day. For most of us, it’s our co-workers. Now that you are not seeing them each day, think about who you want to spend your days with. This will also help you determine where you want to live. Some prefer to be closer to town and social events while others prefer being further away. Maybe you want to move closer to children or grandchildren.
  3. Begin experimenting with things that will help you feel a sense of purpose or self-worth outside of your work. What skills do you have that you can contribute to others? Do you want to volunteer, be a mentor, or help take care of family? Don’t wait until you are retired to get started. Getting involved in these things now will also help you form relationships you can carry into retirement. This may just be the most important aspect of transitioning into retirement
  4. Map out your goals and future endeavors. As you get closer to that day, it will give you peace of mind knowing that you have a plan in place. No more worrying about what you’ll do. It’s already laid out.

Don’t let that first day sneak up on you. Start trying on your retirement shoes today. Each step today will help you feel more comfortable when you finally take that first step into retirement.

If you would like to know how we can help you think through these things and uncover your life’s goals, give us a call or click here.

Depression just after Retirement

So, are you REALLY ready for retirement? Psychology may undermine your health and happiness.

It has been 30 or so years since you first started your career and after such a long time, it seems that now may be a good time to consider retiring. You have put your time in, there are a number of things that you would like to do while you are still young and your savings should provide all you need for the next 20-30 years. After all, you have been wanting to travel more, to spend more time with your children (and who’s kidding whom, it’s really your grandchildren that you want to see) and to have more time to pursue some of the things you have put off all these years. Yes, this certainly must be the right time.

But wait a minute: are you really ready for retirement? There is an interesting and often unexpected phenomenon that occurs as many people transition into retirement. What is it? Post-retirement depression.

Your response (if you haven’t already decided to stop reading because it couldn’t possibly apply to you) is likely similar to many of my clients’ responses: “I don’t think I will experience anything like that because I have been so tired of working for so many years. I’m really ready for retirement.” “That won’t happen to me because I have all of these projects lined up that will keep me very busy after retirement.” or the most common, “I’m sure that it won’t happen to me. After all, you know how much I like to (play golf, sail, travel, garden, etc.) and now I will finally have enough time to do it as much as I would like.” Uh huh, it all sounds perfectly logical and, to some extent, even ideal. But watch out, there could be a freight train coming.

In 2013 a study was released by the Institute of Economic Affairs and Age Endeavour Fellowship that suggested that retired people are “40% less likely to describe themselves as in very good or excellent health than working people of the same age. Mark Littlewood stated that many working people look forward to retirement, however, retirement is often connected with a downturn in health.” [Source]

I witnessed a great example a few years ago. One of my clients retired from a successful career in finance. He had enough accumulated to retire comfortably and was very active in his life, his community and his church. He had many friends and was one of the most upbeat people I have known. Then he retired. After three months he had fallen into such a deep depression that he sought counseling to help himself out. He had lost his purpose and it took months before he fully recovered and returned to “normal.” He wasn’t prepared for the dramatic changes that occur at retirement and the loss of purpose, drive, inter-personal connections and sense of achievement all caused him to suffer an uncomfortable transition.

So what is one to do? In preparation for retirement there are a number of ideas for making the transition successfully. First, create a plan for your finances that allows you to take your focus off of the day-to-day financial concerns and place it back on the things that give you the most joy. You want to know that you can live the life you hope to. So how do you achieve your goals? Start with a plan.

Second, consider easing into retirement instead of quitting “cold turkey.” Most people jump into retirement when they would be much better off working part-time during the early retirement years and gradually transitioning out of the workforce. Part-time work keeps your mind and body engaged and helps offset some of your expenses early on. Think of it as a way to pay for all the fun you will have while you are not working!

Next, consider one of life’s most basic needs, to belong, as part of your plan. What interests do you have and how might you fit into a community of people with similar interests? Maintaining a community around you is a critical part of a happy life and it couldn’t be more important that just after retirement.

Finally, stay fit both mentally and physically. Make a plan to keep moving and to keep your mind and body active. By exercising regularly and continuing to learn, you will keep focused on positive developments and not the void of the things that may feel like they are missing from your work life.

Once you settle in, retirement will be great. With a little advanced planning, you can make the transition work well, too. If you feel you need help, please feel free to give us a call.

Three Questions To Ask When Searching For A Financial Planner

When it comes to filtering through financial planners to find the right one for you, there are some critical questions to ask the firm and yourself throughout the process.

What kind of clients does the firm specialize in?

It is a good idea to search for a planner that serves a demographic that is largely similar to you. Although you should avoid firms that feel like experts instead of teachers, your firm should be familiar with the concerns and scenarios common to your demographic while custom tailoring his advice to suit your life.

What services do they provide?

In asking this question, you are able to find out what the firm will not do for you. Some firms seek to simply be investment advisors, while others offer a far more comprehensive approach (retirement, insurance, estate, tax planning, etc.). The investment advice you receive may be good, but if other factors of your finances are ignored it may not be best for your unique situation.

How personal is my experience with the representative?

This measurement can often tell you if you are interacting with a salesman, expert, or teacher. It is important for the experience to feel like a conversation, not a lecture or a sales pitch. If you find yourself listening 90% of the time, you are not being counseled, advised, and informed, you are being told.

What makes this firm unique?

Be sure to schedule an interview with the prospective planner to find out what the true aim of their firm is for your money. Some firms will be better at maximizing your investments, while others will focus on protecting your hard-earned money in a wise way. If something doesn’t feel right, keep looking.

Learn more about Brown Financial Advisory

A Fee-Only registered investment advisor, Brown Financial Advisory, was founded in 1986 and is located in Fairhope, Alabama. Learn more about our distinctives, and services, or get started on your journey to live with more purpose.