Moving to Retirement – A Client’s Perspective
By Margaret Lewis
I am a consummate planner. Not only do I plan, I usually have multiple contingencies in order. My family and friends tease me about crossing the line between planning and paranoia. So when it came to my retirement I thought I had it licked.
I had developed a formal financial retirement plan with my advisor, Megan Poore, after a divorce. This involved an evaluation of expenses and the development of strategies for saving, investing, and claiming Social Security. However, it quickly became obvious that questions such as what age to retire, what to do with my time, and where and how to live were going to influence my finances. I settled on four guiding goals for my retirement: connecting with family/friends, exploring new places, continuing personal growth, and giving back to the community.
As I approached 64 I smugly thought I was ready to retire with my goals and a workable financial plan in place. And of course I had my faithful list of contingencies. But what I learned as I crossed over to retired life is to expect the unexpected and that the best laid plans will change.
Exploring Pompeii with my granddaughters!
I found that disengaging from work was hard. I realize now that I lacked a well thought-through exit strategy. I held a key position and was heavily pulled by loyalty to my company and co-workers. In addition, bonus timelines and stock option maturation dates came into play – I didn’t want to leave money on the table. Megan saw me set and then change many proposed resignation dates. A family crisis helped put things into perspective, reminding me to stay true to my goals. My thoughtful boss suggested that I drop to part-time work for a few months. The part-time status resulted in a smoother work transition, more time for me to concentrate on family, and continued my ability to collect some additional monetary assets. I made the final leap to retirement in October 2015.
It was emotionally stressful for me to give up a regular paycheck and I completely underestimated the impact on my psyche. It didn’t matter how solid my plan, the amount of money I had, or my long list of contingencies – I was sure I was screwed. To make it worse the market had a slight downturn when I first retired. Megan met with me several times, reminding me of the approach we had agreed on to get me through the “early years” of my retirement. I am happy to report that I am evolving from a mind frame of “making money” to “managing money.” During this first year, as I have seen the plan in action, I have become more relaxed and trustful of the work Megan and I have done.
Beautiful scenery on my recent trip to New Zealand
Health care was a nasty bump in the road. After having good corporate healthcare I entered the world of government administered Medicare. It took much research to decide on Part B and D supplements. Then it hit me in the face that I was going to pay a big adder on Part B and D due to my past tax returns which reflected my work income – making my monthly health insurance costs a lot higher than I had anticipated. Through a lot of web searching I found that I could get the adder reduced to reflect my proposed 2016 retirement income. I did a scary six hour visit to the local Social Security Office and managed to get this done. I now realize I was naive about healthcare and it could be a bigger expense in retirement than I initially anticipated. I wished I had paid more attention to this topic earlier in my planning.
My most important learning point is that flexibility is a key strategy of retirement. For example, when two exciting travel opportunities hit in 2016 – with family to Europe and with a friend to Australia/New Zealand – my immediate reaction was not to do two big trips in one year. Then I realized that this was the “work mind-frame” talking, and I figured out with my retirement lifestyle that I could make both of these work. I can be at a granddaughter’s or niece’s sports event or meet family or friends for dinner at the drop of a hat. I can be a volunteer, attend an educational conference, work a part time job, or just stay home and read a good book. I still have all my plans and contingencies but I now also have freedom!
Many folks have gleefully shared with me all the negative perceptions floating around about retirement – your brain will go to mush; you will be bored; you will be lonely; you will outlive your money. I know now retirement is what you make it and this is why the personal goals are as important as the financial plan. I can’t stress enough how important it is to have both – and that it is never too early to start planning and saving for retirement – And also to have a few good contingencies in your back pocket.
Margaret Lewis is a Lucien, Stirling & Gray Advisory Group client who retired from AMD in October 2015. While at AMD she served as Director, Server Software and Alliances.