Retirement

Your Retirement Date Decision – Is It Only About the Numbers?

By Bruce Godke

March 19, 2024

Your Retirement Date Decision – Is It Only About the Numbers?

Key Points – Your Retirement Date Decision – Is It Only About the Numbers?

  • Saving for Retirement Is Critical, But How Are You Going to Get Through Retirement?
  • Tradeoffs in Retirement Planning
  • Building a Financial Plan That Incorporates Your Financial and Non-Financial Goals
  • Working with a Team of Wealth Management Professionals
  • 4 Minutes to Read

What All Goes into Your Retirement Date Decision?

As a financial advisor who recently took a step back from actively providing investment advice, I’ve helped many people prepare financially for retirement and manage their post-retirement lives. There are a lot of moving parts when it comes to getting you to your desired retirement date and then getting you through retirement. And throughout that process, I can confidently report that it’s not all about “the numbers.”

It is typical for pre-retirees to rely on their financial advisor to run a myriad of projections to determine if they have sufficiently saved enough to provide an adequate income stream. It is common practice for financial advisors to merely stress test their client’s plans to see how they would fare in the event of bear markets, long-term care needs, living longer than expected, etc.

This process is an essential aspect of planning, but most planners’ services end at this point. If this is the case with your advisor, you may want to consider looking into other Investment Adviser Representatives who are able to provide you with a discussion of the tradeoffs of fully retiring early, working part-time, or continuing to work even after “the numbers” show that you can safely retire.

Tradeoffs to Consider

You are never going to be as young as you are today. Your ability to enjoy travel, time with family and friends, hobbies, etc. depends on your physical capabilities. Do you want to risk being able to have these experiences to leave behind a larger estate?

Your “window” to do Roth conversions at a discount prior to December 31, 2025, is closing.1 This is the date that tax rates are scheduled to rise if Congress fails to extend our current tax rates. Working longer could cause you to pay taxes on income that you did not need to meet your needs.

Lastly, choosing to work longer than necessary to meet your spending goals could result in higher income taxes and force you to pay higher Medicare premiums in the future.

Working with a Wealth Management Team to Get to Your Retirement Date and Beyond

As a Modern Wealth Management advisor, I felt blessed to be part of an advisory team that consisted of investment, tax, risk management, and estate planners. Together, our team helps clients make vital decisions, such as when their retirement date should be.

Modern Wealth’s process starts with a thorough discussion about each client’s goals, dreams, budgets, and concerns. From there, they craft a plan that explores the most efficient way of achieving their goals without sacrificing precious time and paying unnecessary income taxes and Medicare premiums. Again, retirement is full of tradeoffs.

Over my long career, I worked with many people who had pre-retirement concerns that were mostly focused on their financial asset “numbers.” However, their post-retirement concerns were usually non-financial. They realized that they needed to prioritize time and energy on the health, renew bonds with family members, create new friendships, develop hobbies, and get involved in their communities. It was an honor to serve my clients by helping them develop and manage their customized plans which balanced their financial and non-financial assets.

Your Encore

After taking a step back in January, I’ve been thinking a lot about how I want to spend my time and energy throughout retirement. Traveling is something that my wife, Heidi, and I thoroughly enjoy, so we decided to kick off my retirement with a worldwide cruise. Of course, that was something we spent a lot of time planning for. But once we return from the cruise, how am I going to spend each day in retirement?

 

Well, helping other people figure out what they want their retirement lifestyle to look like is something that I love doing. That’s why I’m going to keep doing it, as I launch Modern Wealth’s Your Encore program. I want you to truly understand that your retirement date decision is so much more than numbers. It’s about doing the things you love with the people you love. Let’s make sure that you’re planning for the non-financial component of your retirement in addition to the financial component.

Do You Have Questions About Your Retirement Date Decision?

I look forward to sharing more about our Your Encore program before I return from Heidi and I’s six-month cruise. But in the meantime, keep thinking about what all will go into your retirement date decision. If you’re a Modern Wealth client and want to talk to your advisor about your retirement goals and how to achieve them, contact them here.

If you’re not a Modern Wealth client, it’s never too early to start thinking about your retirement date decision and the financial and nonfinancial planning that will go into it. You can start a conversation with our team below to learn more about how to gain more confidence that you’re doing the right things with your money, freedom from financial stress, and time to spend doing the things you love.

Schedule a Meeting

Everyone’s retirement date decision is going to be different, but there is one underlying parallel. That decision isn’t just about the numbers. Let’s start planning for “Your Encore”—A.K.A. your retirement.

Resources Mentioned in This Article

Other Sources

[1] https://taxfoundation.org/blog/tcja-expiring-means-for-you/

Investment advisory services offered through Modern Wealth Management, LLC, an SEC Registered Investment Adviser.

The views expressed represent the opinion of Modern Wealth Management an SEC Registered Investment Adviser. Information provided is for illustrative purposes only and does not constitute investment, tax, or legal advice. Modern Wealth Management does not accept any liability for the use of the information discussed. Consult with a qualified financial, legal, or tax professional prior to taking any action.