If you have spent any significant time with the Mackey Advisors team, you have probably realized that we sometimes sound like a broken record when it comes to the concept of “planning”. That is because almost every new client we work with, we continue to reinforce this huge importance.
Often that importance is not just placed on the financial side of planning, but on the emotional side. The two go together hand in hand to make sure major life events are times to be cherished and enjoyed…not feared.
Many folks retiring come to find that what was always supposed to be a joyous occasion is becoming something to dread. For many people the fear comes from the emotional shift of saving and watching account values go up to withdrawing and possibly watching account values go down. For someone who has worked for 40 years, especially if they have what we call savings “DNA” that can be emotionally wrecking. Some folks can have the battle compounded by boredom or a feeling of uselessness that often sets in shortly after retiring.
Working as a team we can avoid these pitfalls. We use a variety of strategies to help folks better understand the transition from saving to spending. Through smart conversations about how investment models can support spending needs to the potential usage of bucket strategies, a picture can be painted that gives peace of mind during the shift to retirement.
It is also important for each individual to plan emotionally for themselves too. Often retirement can be a transition that may take 5–10 years through a gradually declining workload. That can make it a natural process vs. an abrupt shift. Having deep thoughts and consideration about what a day in retirement might look like is also essential. Map out those hobbies that you have abandoned, decide where your years of talent in the workforce can benefit charitable organizations, and plan to stay engaged. Keep regular lunch meetings with your former co-workers and maybe even consider if part-time employment wouldn’t actually be something you might enjoy. The extra income can also help with that emotional money shift we discussed earlier.
Retirement is just one example of an exciting time in life that can be overshadowed by fear. A wedding, a new baby, a child heading off to college, even a large “bucket list” vacation, can bring about an anxiety and fear that can ruin the occasion. Why spend $20,000 on a European river cruise if the whole time you are gone your stomach is in knots about whether it was a wise financial decision?
Life is meant to be enjoyed and the big events in it certainly should be no exception. What we call Prosperity Planning isn’t just about number crunching it’s about bringing education and visibility so the best times in life can be had free of fear and always lived to the fullest.