People often spend more time contemplating which washer to purchase than they spend planning for their retirements. But even if they’ve sat down to plan the financial side, pre-retirees may not even think to consider what life will be like when they aren’t working. In fact, the possibilities are endless, and retirements are as unique as the individuals themselves.
I encourage the pre-retirees who come into my office to really sit down and talk about what retirement looks like. Retirement doesn’t have to mean sitting in the rocker or watching grandchildren, it means whatever you envision it to mean. Opportunities are boundless, only limited by your desire, energy and creativity. What are you doing today? What did you do this week? How about this month? Where do you want to go and what do you want to experience? You might just be surprised about what your vision of retirement looks like compared to your partner’s dreams.
Since retirement goals are unique to each person, the financial plans to support them have to be tailored as well. The plan for the 70-year-old who wants to go back to college for a Masters in Creative Writing will look different than the plan for the couple who wants to travel in style throughout Southeast Asia; and their plans will be very different from the couple who wants to buy a ranch house in Arizona, or take an RV through every national park.
The sheer range of variation in retirement dreams – especially with adventurous Baby Boomers – means that a one-size-fits-all approach won’t work. Too often, pre-retirees go to an advisor to get personalized advice, and the advisor inputs a bunch of personal information into a software program designed to spit out a 300-page report that supposedly tells you everything you need to know to have a successful retirement. These software packages are great for producing general guidelines. However, they are lousy when it comes to designing a plan that fits your specific situation. You don’t have a one-size-fits-all life, so how can you have a one-size-fits-all approach to retirement?
When working with an advisor, be sure that in addition to any fancy software he or she might possess, your advisor can also show you on a calculator how and why the numbers of your retirement really work. If using software, your advisor should know how and where the numbers come from and be able to explain the process behind the scenes.
It’s like a fast tax return program. If you answer all the questions correctly and put in the right numbers in the right places, it will print out a correct return. But it probably won’t be the very best return for you, because an experienced accountant will know exactly what deductions you qualify for that aren’t in the computer program. Accountants know that each tax-filer’s situation is unique and are trained to look for all of the possible advantages – allowing you to keep more of your money! You know what a difference a good accountant can make on your taxes – would you trust your retirement to anyone less qualified?