By David Adams, June 23, 2017, Financial IQ.com
As advisors, we’re trained to help clients set some magic number for how much they need to save by age 65. Then they can retire, start taking Social Security and live off their investments. Only then can they start to travel and live life. But after 15 years of working as an advisor, I had an experience with my father that led me to change my entire perspective on retirement.
My father was an example of the typical retirement pattern. He worked in retail for 40 years. In his 60s he was still working 80 hours a week. One day while moving boxes around at work he fell and hurt himself. The injury wasn’t serious but I became concerned about his health. I told him he needed to slow down or retire but he kept telling me he needed to keep working to a certain age to be sure he had the money he needed to retire.
Six months later he was rushed to the emergency room because it appeared he was having a stroke. Thankfully it turned out to be high blood pressure instead. Once again, he insisted he needed to go back to work. I went to see him and begged him to quit, saying, “Dad, I’m not losing you to retail.” But he kept insisting he couldn’t leave his job because he didn’t have enough money to retire. I told him, “You can always have more money, but if you wait another two years to retire you may not be healthy enough to enjoy it.” We went back and forth like this for several days until finally he agreed to quit.
Like my father, many of my clients approach retirement from a place of fear. I tell these clients that financial planning is important, but it’s equally important to find a balance where you enjoy life along the way. They need to make retirement a journey and not just a destination.
For example, I have a client with about $1.8 million in his retirement account who was wearing himself out working awful hours. He had been telling me he wanted to quit for years but kept insisting that he couldn’t. We talked about potential solutions, such as taking a pay cut or getting a lower-pressure job that would cover the bills and still allow him to spend more time with his wife. But he was always too afraid to pull the trigger — until his wife got really sick. That was a wake-up call for him.
He finally did make the transition away from his high-stress job and today he’s very excited. He’s going to take on some consulting work and make about a third as much as he was before he quit. But he’s let go of the idea that he needed to save $2.5 million before he retired.
When clients insist they need to keep working to save a little bit more money before they retire, I tell them there’s never going to be enough to make them feel fully secure. They’re never going to feel totally comfortable, no matter how much is in their accounts, if they approach saving for retirement from a place of fear.
I encourage them to change their thinking about retirement and stop thinking about it as a static dollar amount or age deadline, but rather as a dynamic process. Going through this very same experience with my own father taught me how important it is to support clients in finding ways to live life now so they can think of retirement in a more balanced way.
To Your Successful Retirement!
Michael Ginsberg, JD, CFP®