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Retirement is Dumb, Do I Still Need a Financial Plan?

Retirement is Dumb, Do I Still Need a Financial Plan?

October 03, 2019

When the Social Security program was initiated in 1935, the full benefits began at age 65. At that time, the average man could expect to live 12.7 years more (age 77.7) and the average woman could expect to live 14.7 (age 79.7) years more. Today, a man born in January of 1954 (age 65) can expect to live 18.5 years more to age 84.2.  A woman of the same age can expect to live 20.9 years to age 86.6. Calculate your own life expectancy here. I bet it’s longer than you think.

Benefits of working in retirement

Given these facts, it makes sense that retirement for you and me should be different than retirement for our grandparent, or even our parents. But is retirement obsolete? Well, what might be obsolete is the great job with great benefits that employs you from college to age 65 then gives you a gold watch at retirement and a pension at full pay for life. And for most of my current clients, that’s not the goal anyway.

Many people these days expect to “work” throughout their life. They like their profession. They work with their minds more than their body. They may even get paid more as they get added decades of experience. Many of us were also raised to get satisfaction and personal identity from our work. So, we don’t really want to give that up.

Working fun jobs

But sometimes, we are tired of the pressure and the burden of our particular position or a particular company. We don’t really want to stop but we would love to change. So, what does that mean for “retirement planning?” It opens up the option for a goal of “no longer work for money” rather than “quit working all together.”

Most couples can do this with a plan that assumes the “fun jobs” will cover about 2/3 of the working family’s budget. When the couple shifts to the “fun jobs” they stop adding to retirement savings and consume all their earnings. Retirement savings continues to compound for the future. Later, when the couple is really ready for a life of leisure, the retirement funds will have grown to support all their needs.

What’s cool about this is that if you make this approach your stated, intentional approach, you can often shift to the “fun jobs” sooner than you might expect. When you look at a typical family budget, you see that essential expenses account for roughly 2/3 of the household budget.

Core expenses are those expenses that really can’t be skipped without creating a sense of meaningful hard ship. You might not need the deluxe cable package, but you would really like to keep watching TV. These are choices you consider a normal lifestyle, including some dinners out with friends and maybe a vacation someplace warm every once in a while.

Discretionary expenses are ones you can skip if you need to. You don’t have to spend three weeks in Italy, but maybe you do take some sort of vacation. Maybe you don’t drive two new cars, perhaps you get by with one used car for a while.

You still need a retirement plan

So, maybe you won’t have a traditional retirement, but you probably need a retirement plan. A great place to start working on a good retirement plan for your goals is to talk with a couple CERTIFIED FINANCIAL PLANNER™ professionals.

To find a CFP® professional near you, start your search here.

As you visit with financial planners, I suggest a couple things to check:

  • Is the advisor always the client’s advocate – a fiduciary advisor?
  • Is the advisor only paid by clients, not any financial product manufacturer or distribution network? That would be a fee-only advisor.

These two points help assure that you are working with a professional who is committed to your best interest at all times. It seems sort of obvious to me that a professional would work in this way, but it’s not automatic.

A fiduciary, fee-only, CFP® professional can help you make great retirement income choices and develop a comprehensive financial plan that is driven by your goals and priorities and addresses all aspects of your financial life. With a big-picture approach, you will be better prepared to understand your options at every step along the way.

Yes, I am a CFP® professional. I’m always a fiduciary and I only work on a fee basis. And yes, I’m still taking on a few great families to be part of my financial planning practice.

If this article has you thinking about your own circumstances, contact my office at I am always happy to meet with people who are working on their retirement plans. Dunncreek Advisors does not provide legal or tax advice, nor is this article intended to do so.