I think the phrasing of this title can be clearer. It’s not “What must I do,” but rather “What do I prefer?” or “What choices should I make?
What must I do before I quit my job and retire?
I think the phrasing of this title can be clearer. It’s not “What must I do,” but rather “What do I prefer?” or “What choices should I make?”
There are several factors at work here; the important thing I can tell you, as a CPA and a CERTIFIED FINANCIAL PLANNER® professional who specializes in empowering people’s dreams in their next-chapter financial lives, is that you have numerous options for making your post-career life as rewarding as possible.
The basics
The first thing that people often wonder about is age. Should you work until you’re 65? Or 67? Or maybe 70? And what are the pros and cons of each?
The first thing to consider is that working longer is, well, work. Are you up for it? Do you have the mental and physical stamina? How much do you enjoy it? How big a part of your life is it? Some people derive great satisfaction from the jobs they do.
Some things are structured this way. Americans are living longer than ever; that’s why the qualifying age for collecting Social Security is no longer 65, but 67.
Look at your family history. How are the genes stacking up? Of course there are exceptions to every rule: There are healthy people who die young, and sick people who live a long time. But you want to see what’s right for you.
Conservative financial thinking
Just as you’ve been a diligent worker, and a good steward of your earnings, you want to approach the finances of retirement with the same diligence. That’s a good fit for us here at Bridge Financial Strategies. In fact, our default assumption is that all our clients will live to be 100.
We even have a client right now who’s 102. And of course, we can model other scenarios, with other lifespans, if you prefer.
The way it works is this: We have sophisticated software that lets us run various scenarios (such as the less-than-100 I’d just mentioned). As an example: Let’s say you want to retire at 65 and be able to live to 100. That means you’ll need 35 years’ worth of income, post-retirement.
Now we “set the sliders.” For example, let’s say our goal is for you to have a 70-percent probability of success at having sufficient assets to support your lifestyle if you live to 100. We factor in things like current assets and debts, living expenses, taxes, inflation, and market cycles, and start to get a picture. If you want to be even more conservative, we can set that probability slider at “80 percent,” or even “90 percent.” The sliders are adjusting things like retirement age or how much you save or spend. By doing this, you can see how those factors affect the expected outcome i.e., probability of success.
Not one-and-done
Many financial advisors will work with, say, people in their forties, and then hand them a huge document with a big “plan for retirement,” which then promptly gathers dust.
If the plan is not revisited, it will go out of date. Quickly.
My analogy: A plane flying from New York to L.A. basically points itself west. But if it just kept flying straight, it could end up in Spokane. As you know, the plane doesn’t suddenly veer south just after it crosses the Rockies. To the contrary: It makes tons of micro-adjustments along the way. Course corrections.
That’s how I work with you. We constantly revisit, update, and course-correct. Because inflation changes. Market cycles change. Interest rates fluctuate.
The most important takeaway here is the plan. Another aviation analogy for you: This is your parachute. When you’re standing at that open door of retirement, ready to jump, you want to be sure that that parachute opens. Reminds me of that old joke: “If at first you don’t succeed… well, then so much for skydiving.”
To wrap: What must you do before you quit your job? Answer: Make a well-informed plan, with choices that you’re comfortable with, with the help of a wealth management professional like me.
Contact me today. Let’s get started on your plan.