Questions to ask (and actions to take) before you set a retirement date.

First of Several Installments

How much can you learn from other people’s experiences?

Experience is the best teacher. Retirement is usually a once-per-lifetime event.[1] That means you have to rely on other people’s experiences to gain insight into the retirement experience.

• Talk with friends who have retired. Find out what they experienced – good and bad – as they approached and began their retirement.

• Talk to retirement professionals – your attorney, accountant, and your investment advisors. Most professionals welcome the opportunity to share their knowledge of the retirement process and may provide a protocol you can follow.

• If you don’t know a lot of retired people or retirement professionals, take a look at some of the resources on the Department of Labor’s website.

Are you socially and emotionally prepared to retire?

What will you do during retirement?  Develop and ponder a clear idea of how you want to spend your retirement years, including hobbies, travel, and family time. Consider,

• How retirement affects your family members and their routines.

• How much you might miss the office and its social ambiance.

• How to keep in touch with your support network of colleagues, friends, and play-pals?

• Whether you have accomplished your professional objectives and are ready to move on to new social-professional objectives.

Have you visualized your retirement lifestyle?

Do you know what your ideal retirement looks like?

• Will you work or consult part-time? Will you volunteer, travel, dine-out or entertain, hike and camp, pursue new and existing hobbies, explore new personal goals?

• What are you doing during employment that you will stop doing when you retire?

• How will you maintain your self-identity in retirement?

Work provides not only income but a sense of purpose, structure, and self-definition.

When work ends, retirees often experience questioning or identity crises as they forgo titles or professional status. We’ll talk about this in another installment. Give it some thought as you visualize your retirement.

Have you prepared a retirement budget?

Most retirees anticipate substantial post-retirement reductions in both their income and expenses when they retire. Often, the reality of retirement is much more austere than they anticipate.

In all likelihood you will need 70–90% of your pre-retirement income to maintain your standard of living after you stop working. If you plan a host of new (or expensive) activities in retirement, you may need considerably more than that.

Preparing a retirement budget that reflects the lifestyle you envision permits you to approach that lifestyle with confidence in its stability and sustainability.

At Cambyses, we use a Contingency-Scenario approach to retirement budget planning. We prepare budgets for as many scenarios as we can think of and simulate the effects of timing differences and their revenue-cost-tax impacts. The budgets themselves become a blueprint for actions that maximize the probability you will enjoy a financially sound retirement.

We discuss what goes into your retirement budget, and how to interpret it in our next installment.

Cambyses Financial Advisors happily offers our Retirement Planning, Wealth and Portfolio Management, Financial and Estate Planning, and Business Management Services to Investors, Businesses, Donors, and Potential Donors. For investors who share our charitable commitment we design, implement, and manage Lifetime Giving and Philanthropy Plans, Donor Advised Funds, Private Foundation, Trust, and Estate Planning solutions. 

These Articles are not an endorsement of any product or vendor we mention, nor an offer to buy or sell any security. Investments in sector companies may be risky or speculative. Investments may not suit your risk tolerance, investment objectives, or your existing portfolios. Consult your financial advisors or contact us at: +1 (818) 489-4228 or steven@cambysesadvisors.com

[1] Serial entrepreneurs excepted. The author, for example, has tried retirement four or five times – and found it doesn’t fit his life-patterns.