Photo of Ray Ferrara CFP Ray Ferrara CFP Feb 04, 2019

Many look forward to retirement.  Others can’t imagine not working because it is more about who they are, then what they do.  Either way there is a lot consider and often it can be confusing and overwhelming.  Two common denominators regarding retirement are wealth and health.  Without sufficient assets and decent health, the golden years could be tarnished.

There is no time like the present to add to the nest egg if you are still working.  Saving at least 10% of your income should be the goal.  Maintaining a healthy lifestyle should be a lifelong project.  Make sure you have a good exercise program and see the doctor regularly. 

Do you see yourself working and dying at the desk, or do you see yourself thinking about sleeping in every Monday through Friday?  Makes no difference as the third common denominator is restructuring your life or as we like to refer to it – you need to REWIRE.

Okay, let’s admit it, the idea of not setting the alarm clock to go to work every day, not opening the computer for emails with that first cup of coffee, not eating lunch at the same places, not making that daily commute, etc.  may seem appealing.  But suddenly the structure you have had in your life for 40 years or more collapses.  We all need and want some degree of structure.

For the first few months, you have lots to keep you busy around the house with all of those projects you always wanted to do, but just couldn’t find time while you were working.  What happens when they are all done?  Maybe you visualize playing golf or fishing more, seeing the family more frequently, volunteering, or maybe even starting your own business part time.  However, more often than not there is only so much of anything that you can do on a sustained basis.  In fact, some folks love their new found freedom so much they resist structure, but that in and of itself is still structure.

One of the basic fabrics of living is to have a routine.  It is so important that many times we have one and don’t realize it because the actions become innate.  When you get ready for the day, don’t you follow a routine in the bathroom and get dressed a certain way each day?  These are just two small examples of our need for structure. 

First, if you do not have a personal and financial plan, now is the time to do one.  Things are going to be quite different and a plan will bring some balance to the uncertainty of where to live, what to do, how to invest, setting up a cash flow to replace the paycheck, leaving co-workers behind, making new friends, creating new support systems, wondering about medical insurance, etc.  A plan should help eliminate anxiety and make life more predictable.  The plan needs to be written so you and your spouse have it handy for reference.

REWIRING is not easy.  Let’s concentrate on the financial side.  Have you lived with a budget while working?  If so, this step will be easy.  If not, it is time to do one because there is no paycheck anymore.  Some expenses will be reduced or eliminated and new ones will show up.  Divide the budget into the fixed expenses (household, medical, transportation) and match those with predictable cash flow (pension, Social Security) and variable expenses (travel, entertainment) matched with variable income from investments.

Simplify.  Consolidate bank, investment and retirement accounts.  Examine your tolerance for risk.  Even if you have had a high tolerance in the past, do you really need to take that higher risk in retirement?  Only take as much risk as necessary to maintain your lifestyle.  Keep 15-18 months of cash flow needs in cash assets.  When the market goes down, you will not be forced to sell the investments as you can use the cash. 

There is so much more to consider.  You will likely only plan for retirement once, but we do it every day with our clients.  Let us help you.  Why not visit us in our Tampa or Clearwater office for a complimentary meeting to learn more about how to REWIRE.

The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and are subject to change.

Investment Advisory Services may be offered through ProVise Management Group, LLC.