All Articles

The Natural Transition to Retirement

It’s the day many American workers look forward to. And it might be fast approaching for you too. So if you are one of those workers whose retirement date is approaching, you might ask yourself if are you emotionally and financially prepared for what lies ahead.

“What Are You Doing Today?”

It is a question typically asked in morning sales meetings, but the level of urgency differs dramatically when one spouse asks it to the other over morning coffee. “Oh, nothing,” is not the best choice either. A person with nothing to do might find himself or herself thinking, “I have no friends.” Or, “What’s wrong with me?”

There is usually a certain amount of normal emotional vulnerability when someone goes through the transition to retirement. If you are used to being constantly active as well as mentally challenged, and then it stops abruptly, you can feel uncomfortably out of control.

“Lunch? Already?”

Financial advisors provide more attention to where a new retiree’s mind and heart are today, and provide reassurance in their current lifestyles, because later on, clients’ wants and needs change. However, schedules do tend to change quicker. Let’s be honest. If you and your spouse are up at 4:30 in the morning, lunch WILL come early, won’t it?

One financial advisor jokes whenever he speaks about one of his earliest and dearest clients. He asked about the amount of time the couple spends together now that they’re both retired. “I married him for better or for worse, but not for lunch,” she said. Work, routine and structure stop when you retire. It is out with the old and in with the new.

New Beginnings

Income is a top priority. Oftentimes, people feel the loss of not getting a paycheck. They were so conditioned to receiving them over the years that what intimidates them now, as retirees with adequate retirement income, is that physical check or automatic deposit they closely monitored doesn’t take precedence as it once did.

Hefren-Tillotson advisors explain to clients they can still receive a check. There is no adjustment to not receiving a paycheck, and they can and will, like they used to, only now it’s from their retirement income or other source. And then there’s talk of Social Security benefits going away in 2033 that routinely shakes people up. Congress said it could leave “only 70%” of the benefit if nothing is done. Remember that this is supplemental income.

So, What is Your Plan?

Clearly, the point is retirement is a huge transition and adjustment for men and women after being employed since their early 20s. So much of a person’s identity is wrapped up in what was involved in that career. With most people, it will be a multi-year process to phase down. They’ll take a side gig or something they’ve always wanted to do, but not for the money, because their “new job” is navigating the next 20 or 30 years.

In your mid-to-late 50s, talk of retirement should be more serious. Everyone is different and certainly unique in what they determine their own retirement to be. Have you known that one friend or neighbor-guy who was so strait-laced during his working years that when he retired, he grew a beard, a long ponytail, and bought a Harley? No matter what city or state you visit, you will likely see men like this.

Some retirees start businesses. Some don’t. Some consult. Some don’t. Some coach high school football. Some don’t. Retirement is a fun and unique time. And like those Harley riders, it is the true sense of freedom they feel that really matters.

Know Your Priorities

Clearly, income replacement must be dealt with. If expenses have been trimmed or cut, downsizing might be the answer. Moving to a less expensive place to live, especially in your latter 50s, when portfolios are shifted to a more balanced approach, income is a major priority and many don’t need as much as they did anymore. They don’t go without; they trim and reevaluate their lifestyles and their place in life.

On the list of priorities, do you need a big house? If you downsize, how much downsizing should you do? Do you have health issues? Is your home adaptable for when you both get older? Are your hallways wide enough for a wheelchair? Do you really need that vacation home, boat or RV? 

Your Hefren-Tillotson advisor has made it so you can be comfortable – knowing you’ll receive outside income, supplemented with your outside investments, that you can rely on without worrying about unneeded risk or market volatility.

When clients don’t have to work in the job that pays them in their career, they are more easygoing. Or, if they continue with their job, they tend to have more fun doing things they couldn’t or wouldn’t do before at a reduced pace. Your Hefren-Tillotson advisor keeps you on track. At this stage and transition point in your life, you can teach your family (and your heirs) how your advisor works with you to help the family enjoy wealth as well.

Simplify the Process

Perhaps “retirement” isn’t even wired into your system. By nature, people don’t want to lose to control, or their identities, as the one in charge, so it is difficult to make the change.

But it’s important to know your biggest concerns and how your family will survive if you were disabled or gone. It makes you think. Who helps you make those pain points go away?

While it’s true that some financial advisors like to talk in dollars and cents rather than conceptually, the perspective really is about what retirement looks like to YOU. What are YOU going to do every day? Do YOU have enough money to last?

All the boxes should be checked. Flexibility is necessary in financial planning. You might be bored. You might want to volunteer. It helps to be open to opportunity and have a vision.

All clients that go through the retirement planning process also struggle nearing retirement age. And when the financials are all in order, everything else seems to be in order too. It is the first step to letting go of careers and schedules and moving into the transitioning phase of having fun.

DISCLAIMER: Past performance does not predict future results. This report is based on data obtained from sources we believe to be reliable. Hefren-Tillotson does not, nor any other party, guarantee the accuracy or completeness of this report or make any warranties regarding results obtained from its usage. All opinions and estimates included in this report constitute the firms judgment as of the date of this report and are subject to change without notice. This report is for informational purposes only and is not intended as an offer or solicitation to buy or sell the securities herein mentioned.

What can we help you find?