The Psychological Challenge of Transitioning into Retirement
Most people started their working careers at a young age. Mowing lawns, summer lemonade stands or working as an apprentice before they transitioned into their life long careers of 30-40+ years. The mindset of constantly working, providing for your family and building your nest egg for you to enjoy retirement is something that was not created overnight. It was built over decades of hard work and saving. Both hard work and saving are two core values for many of our clients. And for many, transitioning from this “accumulation” mindset to the “distribution” phase of life presents a psychological challenge.
The truth is, work provides both a purpose and peace of mind for most people. When that light switch is finally turned off, the uncertainty of your purpose can be daunting even if you have your financials in order. Turning off the drive to be productive and useful is something that some folks can never do. It’s much harder than figuring out the numbers so here are some questions to consider:
> If you were to look back 25 years from now and could say, wow, my retirement was everything that I wanted it to be. I did what I wanted, when I wanted, with the people I wanted to do it with. What would that look like?
>What are 10 things I’d like to do when I’m retired?
>What do I want to do in the next five years?
>What do I need to take care of in the next 24 months.
From a financial perspective at retirement, and for the first time in many people’s lives, income may suddenly be less consistent than it had been for 30-40+ years. Embracing the new idea of living off of the nest egg you spent all of those years building is a tough reality to accept and is runs counter to those life values of working and saving.
And with the improvement in medicine and technology, people are living longer and the length of your retirement could be just as long as the years you spent working. This prompts the financial questions of:
>Is my current withdrawal rate suitable to live off of for the next 30-40 years?
>Where will my supplemental income come from?
>What’s the most efficient way to draw down from my investment portfolio?
>Should I become more conservative as an investor now that I’m retired?
You may spend decades building your nest egg, living by your values and climbing the mountain of life. When you’ve finally reached the summit, you may need help navigating the peak and down the treacherous road of retirement. It may be a once in a lifetime even for you, but ACM’s Wealth Advisors are helping folks with this every day.
ACM has created retirement planning checklists over the years and dynamic withdrawal strategies to provide the financial peace of mind you deserve in retirement. We plan for the unexpected so when or if that life event occurs, you have an understanding it will not derail your financial plan. We work with clients to ensure the transition into retirement is gradual and does not leave you with unanswered questions.
Reach out to your ACM Wealth Advisor if you have questions or feel that a conversation may be helpful.
Advisors Capital Management, LLC is an investment advisor registered with the United States Securities and Exchange Commission. Registration does not imply any degree of skill or training. All investing carries risk, including the potential for the loss of principal and past performance is no guarantee of future results. This content is for informational purposes only, can change at any time without notice, and is not investment advice or a recommendation to trade any security. Indices are not available for direct investment. We only provide services in jurisdictions where we are registered. Our disclosure brochure (ADV Part 2A) and customer relationship summary (ADV Part 3) are available at https://adviserinfo.sec.gov and upon request.
