When asked several months after retiring from a long career in higher education how her retirement was going a client replied, “I made the classic mistake”.  I asked, what was the mistake? “I retired from something instead of to something,” she said.  She went on to explain that she really did not have a lifestyle plan when she retired. Her spouse was still working and she found herself wandering into retirement. It had taken her the better part of a year to figure out how to live daily life in retirement. She had to adjust and adapt. One example she gave was that when she retired she hired a personal trainer to come to her house twice per week.  After several months of working with the trainer, she told the trainer “I am not having you come to the house anymore”. Astonished, the trainer asked why?  The reply was “from now on I am coming to your facilities”.  Furthermore, she was increasing her sessions from two to three days per week. My client realized she needed to get out of the house more and to have more social interactions.

Fortunately, she and her husband did have a financial plan for retirement. That however is not always the case. Recently I met with a couple that had been retired for about a year. They wanted to know if they should commence their Social Security. They were ages 65 and 63. They were considering filing before their Full Retirement Ages. They had no plan for managing retirement cash flow nor a spenddown plan. Similar to my client who realized after she retired that she need a life plan, they needed a financial plan. It was not too late.

The message, as it so often is, was that the best approach for their financial management “depends” on their specific circumstances.   To be examined was how much and when should they withdraw from their various “buckets” of cash, investments and retirement accounts and, of course, should they start Social Security retirement benefits now.

A key factor was that the value of their IRAs are substantial. Once those are subject to Required Minimum Distributions their income including Social Security and investment income will be higher than at present and likely they will be subject to some level of Medicare Income Related Monthly Adjustments. Also discussed were attitudes about investment risk and money.

A flexible plan based, in part, on thoughtful tax and cash management planning was developed. Like lifestyle changes, financial plans can be developed and adjusted after retirement commences. For the couple that met with me, they had reached their “now what?” moment and took a positive action to meet with a financial planner. They did well to recognize they needed to develop a plan, take associated actions and continue retirement with a financial plan in place. Retirement is a new beginning and time to plan accordingly.

Perhaps this is you. Retirement planning is a core component of financial planning that we undertake for clients.  If you are interested in finding out more we are glad to schedule an absolutely no obligation meeting or discussion to help you feel confident that your retirement is well planned.