Retirement can look so different from one person to another. You might think of retirement in terms of both you and your spouse quitting your jobs at the same time and never working again. If that is your retirement plan and you are able to do this, great! If you want to take a different approach, a more gradual one, that is fine as well.
A gradual retirement approach
Maybe, you need or want to retire slowly over time–perhaps transitioning from full-time to part-time at first. This is what Goodwin Investment Advisory calls semi-retirement. Or maybe a gradual retirement for you means one spouse retires a few years before the other. This could also mean that you choose to delay when you decide to take Social Security, or when you begin taking distributions from your retirement accounts. There are many factors involved in creating your ideal retirement plan. An unexpected reason may lead you to retire earlier than planned, but with the option to go back to work in the future.
One of our client families had an unexpected health event that made them rethink their retirement journey. Here is Judy & Bill’s story, as written by Bill. (Note: Names changed for confidentiality)
In early 2018 it was found that Judy’s breast cancer had metastasized, and was medically speaking incurable. Statistics showed that only 1 in 5 patients survive more than 5 years.
Bill was 53 at the time, and earning very well in his high-tech leadership job – but Judy & Bill realized that no amount of money in investment accounts could compensate for lost time, and therefore they decided to change gears to maximize whatever time they had left.
Bill spent a lot of time calculating whether he could retire, but realized that he wanted an external input – someone with financial experience and personal insight – to help him reach a sound decision. He found Goodwin Investment Advisory and their personal stories resonated with him. Team GIA reviewed Bill & Judy’s situation and agreed that their plan was sound.
They decided to build a house in Woodstock GA, being a location with lower cost-of-living, and closer to grandkids. At age 55 Bill retired from his job, and they moved into their new home – all the while focused on spending time with one another, and time with children, grandchildren, family and friends. This included traveling to family in other countries, and traveling for fun to various global destinations.
After 18 months of being full-time husband/caregiver and grandpa (including a treehouse project!), Bill recognized that some extra income could be beneficial to stretch their savings and retirement accounts. So he started a few part-time jobs using his skills from his high-tech career – doing about 10 hours of work per week, while continuing to focus primarily on his roles of caregiver to Judy and grandpa to 10 (ten!) grandkids.
During all of this, the team at GIA were an incredible support to Judy and Bill, and the team became trusted friends and continued to advise and guide them along the journey.
It is now more than 5 years since the metastatic breast cancer diagnosis, and despite some further spreading, Judy is still able to have quality time with her loved ones – and they have made precious memories with the grandkids! So the story is still unfolding, and Bill & Judy are keeping things flexible – both on the income side (maybe work more hours per week?) and the expense side (maybe trim back the international travels?)
Bottom line? Financially speaking it was a crazy decision to retire at the peak of his income earning potential, but Bill & Judy have NO regrets! With the financial expertise of Team GIA they will carefully manage their income and expenses, even if that means living more modestly later in retirement, because they know that these “extra” years with one another and with their family and grandkids are precious and priceless.
Your retirement, your way
Every retirement plan is different. The specifics of your customized strategy is designed around your unique situation and goals. You will need to determine when you want to retire, when you want to begin taking distributions from your retirement accounts and how much money you plan to take from your accounts each month. Your advisor can help you understand the implications and guide you to minimize risks.
A dynamic approach
The main thing that contributes to a sustainable withdrawal strategy in retirement (link to RMDs blog) is your ability to make decisions that reflect the changes in the market. Your goal might be to live primarily on the interest, dividends, and market returns from your portfolio year after year, but sometimes that is not enough. This is when you can decide to either get a part-time job, or create some other passive or active income streams. (link to income streams guide)
You want to create a balance of achieving your financial goals without depleting your assets. Your financial advisor can help you navigate your retirement decisions with expert knowledge, resources, asset management, and a plan. Your advisor will hold you accountable and encourage you along the way to have the discipline to follow your plan and to help you make changes when necessary.
A great resource is a book written by Goodwin Investment Advisory’s Founder and President, Tim Goodwin, Exponential Wealth – How to create Sustainable Income for Life. Or, read some of our client stories on our website that discuss different phases of retirement planning.
Retirement is not one size fits all. Every situation is unique and hopefully you get the opportunity to design your ideal future. You may plan to stop working entirely and enjoy travel, family, and other leisure activities. Or you may want to pursue something that you have been longing to explore, now that you have more free time. Or if you have the means you might decide to retire for now, with the plan to go back to work once your children are out of the house.
Make sure both you and your plan are flexible.
Is your plan flexible in case something unexpected happens and you need to make adjustments? Unexpected events arise and it is always good to have someone who can help guide you through those challenges.
There is a tension between taking things “one day at a time”, and yet also planning for the future. It is good to embrace this tension, and talk through the implications with your partner, your family and your financial advisor.
At Goodwin Investment Advisory (GIA) we strive to help clients navigate the entire process of retirement, including individual pain points and fears. Our goodLIFE pyramid guides the discussion to include much more than “just” the financial component of your retirement, but also your dreams and purpose. Our hope is to bring you comfort, security, confidence, and peace of mind. Before GIA can help you address the how, you will need to know your what and your why – meaning you will need to answer for yourself or have a conversation with your partner about what you envision your retirement looking like. Then you can begin setting goals to live out your retirement dream.
If you would like to meet with one of our advisor’s you can start by scheduling an intro call with our consultant. Then, you can meet with one of our CFP® advisors who can help you navigate whether you are on track to afford the kind of retirement you want.
Disclosure:
All investment carries risk, and GIA cannot guarantee results. The comments above are based on our experience and that of some clients, but your experience may be different. While GIA strives to help clients through the processes mentioned above, it may not be ideal for you personally.
Disclosure – All investment carries risk, and we cannot guarantee performance or results. Past performance does not guarantee future results. GIA does not earn any compensation from any of the non-GIA links provided in these resources. The market insights, podcast, blogs, book recommendations, self improvement thoughts, food recipes and activities are based on our perspectives and experience, and may not apply to your unique situation or be appropriate for your health and wellness. We are not aware of any conflicts of interest relating to any testimonials or endorsements. Please contact us for any questions relating to the content above, or to discuss how we can support you in your specific situation, and help you to reach your financial and personal goals.
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About the Author: Tara Bruce
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