A well-balanced approach for retirees

Retirement is different today. Gone are the days when you received a gold watch for your decades of service and went home to putter in the garage or knit sweaters for your grandchildren. Not that those activities aren’t still part of retirement – they are. But increasingly, American retirees find themselves back at a job – at least part-time. Others may start a new business, pursue a passion, take classes, or volunteer, causing them to quip, “I’m busier now in retirement than when I was working!”

Financial advisors see it all. In this article, we hear what these professionals who work directly with retiree clients see daily, how they see retirement impacting clients, and their advice to ease the transition.

Rise of the Semi-Retired Life
Americans are no longer going from a full-time job to no job at all in their so-called “retirement” years. A growing number are staying employed – either because they want something to do, but in a larger number, because they don’t have enough money and investments to fund their retirement needs.

According to the U.S. Census Bureau and the U.S. Bureau of Labor Statistics, 13 million Americans age 65 and older will remain in the work force – at least part-time – by 2024.

A perfect storm of factors converged to create this trend. Some retirees leave their careers at the traditionally appropriate age range but do so with bodies and minds that are still healthy and able to work – they aren’t ready to “sit around.” Some retirees discover they can’t fund the increasing cost of living as inflation leaves their resources falling short. Some want to keep working to delay taking Social Security benefits.

Carolyn Larsen-Wieber, owner of Carolyn Larsen-Wieber Financial Planning, LLC based in Sanford, North Carolina, watches these retirement trends and hears the concerns many clients share as they prepare for the next phase of their lives.

“They believe that after retirement, they’ll have nothing to do, and will be completely without purpose, so they resist the idea of retirement,” she told Advisors Magazine. “For them, easing into retirement by working part-time has helped significantly. Also creating a purpose is essential.”

According to the Pew Charitable Trust research foundation, 31 percent and 40 percent of retired women and men respectively reported they work because they want to.

Volunteering often fills the void, Larsen-Wieber said. In fact, statistics bear that out. More than 25 percent of the active volunteering population in America is age 65 and older, according to Aging in Place.org. Adding in volunteers ages 55 to 64 raises the total to 35 percent.

Retirees Especially Need a Social Network
It’s only natural that one’s social network often intersects with and revolves around one’s colleagues at work. After all, that’s where you are for a large portion of the day.

Retirement changes that.

“It can be easy to feel lonely with an intimidatingly large amount of time on your hands and a sudden decrease in social outlets,” said Dennis D. Coughlin, a certified financial planner and co-founder of CG Capital in New Hartford, New York. “Leaving work often correlates to leaving friends and the idea of being retired could be very lonely without a social network.”

Fortunately, the internet has revolutionized access to information, Coughlin said. Readily available are lists of classes at local senior centers and community colleges, contact information for social groups that match your interests such as cooking or photography, and online social and video-conferencing platforms to stay in touch with family and friends.

“Technology has removed many barriers and complexities and made it so easy to find an abundance of lifestyle opportunities regardless of your age,” Coughlin said.

Health Matters
Recent research by the Center for Disease Control and Prevention documented the role that physical activity plays in delaying, preventing, and managing many of the chronic diseases that often affect people age 50 and older. These conditions include anxiety, cardiovascular disease, depression, diabetes, high blood pressure, high blood sugar, and obesity.

While not a medical doctor, Coughlin has observed how a lack of physical activity can affect retirement plans.

“Without a clear direction of how to manage time, transitioning into retirement can inevitably lead to an inactive or sedentary lifestyle, which can spark serious long-term impacts on your health. In general, retirement typically brings changes to daily routines, the amount of daily social interaction, and active synergies that can and will impact your health,” he said. “Certainly, having your financial house in order is an important part of your retirement planning, but without awareness of your health decisions, your retirement journey can be compromised.”

Money Matters Still Need Your Attention
Yes, you did the right thing by saving up what you could and maximizing the employer-sponsored benefit plan from your workplace. But that doesn’t mean you get to put the rest of your financial life on autopilot. In fact, it is even more important now to keep close tabs on what is happening with your monetary assets.

So says Stephen Humphrey, a financial advisor with Lincoln Investment in Iselin, New Jersey.

“When your paycheck ends, this is a critical time for [implementing] tax savings and withdrawal plans that are balanced withdrawal plans minimizing tax liabilities and taking strategic distributions,” Humphrey said.

Here are a few other money-oriented tasks Humphrey suggests:

• Create an emergency fund
• Allocate assets and determine how much spare cash to invest in bonds, cash savings, and stocks
• Draw up a plan to meet long-range goals such as kid’s college expenses
• Investigate ROTH conversions
• Pay attention to health issues again: Take an honest look at what your health care requirements could be should you live past age 90.

It’s Your Time
Your retirement is yours; it doesn’t have to match anyone else’s retirement.

Whether you have to – or just want to – work part-time, that decision is one you should discuss with your financial advisor for the most secure retirement financially.

Enjoy exploring your options. If you want to start a business offering bonsai plants you grew yourself, then do it. Just do your research so you know your competition and your costs. If you want to volunteer at your grandchildren’s school – then do it!

Let your retirement be what retirement has always been about: Doing what you want now that you can.