Yahoo Finance Creating a Vision for Retirement
What is your motivation to retire? At some point, many people begin to dread going to work. A job they used to love is a job they now despise. Reasons may include the market, the economy, new regulations or stock holder expectations. Many companies do not treat their employees as well as they used to, and some workers, especially baby boomers, are ready to move on.
You may no longer like your job, but is that the best reason to retire?
There are other considerations. First, think about your retirement and what you want out of it. You may not have thought further than "I need to leave this job," but a better approach is to think about what you are giving up and how your new world will look. What will you do in retirement?
Most people have spent plenty of time thinking about the numbers side of retirement: how much money they will have in their accounts, the amount they will get from Social Security and pensions, the cost of living in retirement and the various tax, inflation and return rates. But they have not considered what they will do when they retire.
One of the best ways to prepare for retirement is to address that issue. I complete an exercise with clients in which we think about what they really enjoy doing or what they have always wanted to do but never did. From that exercise, they are able to create a kind of bucket list.
This bucket list can become a true road map for retirement. It can lead you to what you want to accomplish after you retire from work and before you retire from life. Is will also help you create a spending plan. You can build a list of all of the things you will be doing in retirement, and from there, you can build a retirement budget. Understanding your true cash flow in retirement will help you determine if you will ever run out of money.
A few years back, I began working with a couple who had partially retired. The wife had stopped working, and the husband continued to do some consulting. In fact, he was on his third consulting job after she formally retired. During one of our meetings, I asked: What have you always wanted to do but have not done? The wife jumped in with an immediate answer. She said she hated Virginia during the winters. She disliked the ice and snow and the long lines at the grocery stores before an imminent storm. She said the last winter storm caused them to lose power for over three days.
I asked her what she wanted to do about it. She responded that she could not do anything since her husband was still working. Then I asked: Isn't he consulting, and can't he do that in different locations? He agreed that he could.
For the next few months, we began to build a plan for them to live outside Virginia during the winter. It started with a two-week trip to Florida the first winter, and then a month, followed by two months. Now, the couple spends about five to six months each year in Florida, Arizona and sometimes even the islands.
It was a great way for them to really enjoy their retirement, but it took different thinking and some planning.
Consider how you feel about your current situation and what you would like to do over the next few years. This planning will help you budget, build a financial plan and invest for retirement. It's the best way for you to think more about where you are going versus where you've been. This is the key to truly enjoying retirement.
Kelly Campbell, certified financial planner and accredited investment fiduciary, is the founder of Campbell Wealth Management and a registered investment advisor in Alexandria, Va. Campbell is also the author of "Fire Your Broker," a controversial look at the broker industry written as an empathetic response to the trials and tribulations that many investors have faced as the stock market cratered and their advisors abandoned their responsibilities to help them weather the storm.
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