Ready to Retire?
Part of retirement is to plan on how to spend money saved over the years, an expert says
By Deborah Jeanne Sergeant
Are you ready to retire? Sure, you may have 401ks, IRAs and other investments lined up for your retirement nest egg, but that’s not all you need, according to area financial advisers.
For one thing, you need to be ready to spend instead of save.
“Even if someone is financially stable, which is definitely subjective, they are always apprehensive about retirement because they are conditioned to receiving a paycheck and at retirement that stops,” said Cynthia Scott, financial adviser and owner of OMC Financial in DeWitt. “If they are working with an adviser, they need to begin to plan at least six months for the retirement. I have many clients who begin one year before.”
Another reason to retire is feeling like they’re ready to step away from their career. Even with a stressful job, that can be tougher than what it seems. Scott said that is feeling like you’ve accomplished everything you want to and it’s time to pass on the baton.
Considering your health is also important. People in poor health may want to retire so they can better care for themselves and also enjoy the remaining years they have left.
“Everyone knows someone who has either died early or is fighting a medical condition,” Scott said. “They begin to assess their longevity and want to spend more time with family and friends.”
Planning what to do is as important as how to fund it. For example, many people find fulfillment in volunteering for causes which they feel passionate about — a much better way to pass their days than merely watching TV or aimlessly puttering around the house.
“One mistake people make about retirement is believing that they have enough to do every day,” said Vicki R. Brackens, chartered financial consultant and president and financial planner at Brackens Financial Solutions Network, LLC in Syracuse. “Particularly for individuals who had busy work schedules all of their lives. I ask, ‘What are you going to do with your time each day?’ We have things to do for three months. That’s the ‘honeymoon’ of retirement. What are you going to do every day? Pencil it out. One reason there’s a high level of dissatisfaction in retirement is there’s no plan for their time. If we haven’t figured it out, it may not be time to retire yet.”
Brackens said that includes mental stimulation as well, so that retirees remain engaged.
Where to go also matters. Brackens encourages those soon-to-be retirees to decide where they want to live — not a decision to make likely. Visiting a potential home on vacation doesn’t necessarily mean it will be a good place to live fulltime.
“It’s very costly to move across the country and move back,” she said. “Do you know about the services, the culture, the healthcare systems and the weather? Florida sunshine looks great but it’s also hot. Will you miss having four seasons? How good are you at making new friends? Do you have support systems in place? Creating how you’ll live your life and where, you should take as much care with those as your finances. We took years to build your financial plans. You should spend more than a couple of weeks deciding where to live.”
Many charities need volunteers to support their mission.
You need to have a personal reason to retire. Caring for elderly parents or grandchildren or supporting a spouse who is launching a business or other sizeable endeavor can all contribute to the need to scale back and retire.
Randy L. Zeigler, certified financial planner and private wealth adviser for Ameriprise Financial Services, LLC, Oswego, said that many people tend to know it’s time to retire when “they hate their jobs and want to wake up to do something different every day.”
Another reason could be to move closer to family members, requiring them to quit their current position. If they’re close to “retirement age,” that may be enough to tip the scale.
Zeigler also said that for some people, “the financial rewards of their current employment arrangement are no longer worth the stress and physical toll it is taking on them, their spouse or their marriage.”
He encourages people on the cusp of retiring to consider how they’ll socialize once they retire. With those ties severed, many people lack the network that work friends provide.
“Men in particular, often undervalue socialization issues until they no longer have the same work friends and regular acquaintances that they had before they retired — often to their own detriment,” Zeigler said.
Join a gym, club, body of faith or other group. Taking a class or course short-term can also allow you to try it out and meet some new people. You can also prolong work friendships by planning meet-ups with work friends.