Set goals, set goals, set goals….. It seems like that’s the mantra in financial planning. Unsurprisingly, the biggest goal among our clients is retirement. Finally crossing that finish line is a momentous occasion.
You worked hard, sacrificed, planned, and saved, and now it’s time to retire. You should feel like a rockstar! Your efforts have paid off. But many don’t talk about what comes after you retire. Retirement shouldn’t be viewed as a finish line. Hopefully, it’s just the beginning of a fulfilling life without the alarm clock. Here are some pointers to help change your mindset as you retire.
It's time for a big money mindset change.
The truth is retiring really throws a monkey wrench in everything you have done up until this point in time. Changing from growing your assets to drawing them down is a huge game difference.
- You used to set retirement savings goals (10%, 15%, 20% of your income), but retirement changes the savings goals into budgeting goals that should be aligned with your lifestyle choices and finances. Based on your assets, how much of your investment portfolio are you able to spend each year?
- You used to ask yourself how much money is needed to save for retirement and question if you were saving enough. Once you are retired, your focus will switch to how long your savings will last. Do you think you will run out of money before you run out of life?
- Pre-retirement, your investments were likely focused on growth; now that you will rely on your investments, income becomes a factor and probably warrants at least some changes in the way you have been investing. Your appetite for risk may change as your money mindset changes in retirement too. Market volatility may now give you the same butterflies you felt on a roller coaster. Panic selling in retirement can be one of the worst investment mistakes. Is your portfolio aligned for your current risk tolerance and your goals?
It’s more than a money mindset change.
Without having to clock in for a job to support your lifestyle, your calendar has a lot more room for flexibility and allows you to dictate how you spend your time and your resources. While not setting your alarm for an early morning wake-up sounds appealing, the reality is we are creatures of habit. Most of us resist drastic change.
Today, more and more employers are allowing veteran employees to ease into retirement, allowing employees to shorten their workday or week. If this option is available to you, it’s a great way to help ease into retirement. Use your days or time off to figure out what you want to do, what will fulfill your time and your mind. If your current employer can’t accommodate a gradual retirement, you could always consider a part-time job or volunteering to provide the same gradual effect.
While developing a financial plan for retirement is important, the personal side of retirement is equally, if not more important. It all starts with a question: What do you want to do with the next phase of your life? You can read our blog article, Retirement Planning: Beyond Finances, for more information.
Don’t forget you can always ask for help.
Sometimes help can come from reading articles like this to get you thinking. Other times it might take a little more, and that’s ok. Family, Friends, and Professionals can all provide support. Certified Financial Planners can offer guidance to help set and meet your retirement goals no matter where you are in your retirement journey. If you need some help, reach out.
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