We don’t just suddenly change. We evolve. The typical financial planning projections focus on retirement as a one off occurrence in our lives. One day we are gainfully employed, the next day we are sleeping in, having lunch at home and playing golf.
It isn’t that simple. Especially these days. Planning for the typical retirement is often done in phases. Some opt for a second stage career, 2.0. Some retire from a job, take a few years off and then start their own business or start managing a vacation property. Some go from a paid position to a volunteer position pursuing a charitable purpose.
And this development isn’t occurring at the social security’s definition of Full Retirement Age anymore, like age 66 or 67. We are seeing that it is occurring at age 50 or even younger.
In my opinion, retirement means you hang up one endeavor. You retire that old hat. Buy a new one or start wearing a different style hat. Maybe you decide that hats don’t look good on you anymore at all. You’d rather just go without. Let your hair down.
Serena Williams recently wrote an article in Vogue Magazine about her “retirement” from professional tennis and entertainment.
“I have never liked the word retirement. It doesn’t feel like a modern word to me. I’ve been thinking of this as a transition, but I want to be sensitive about how I use that word, which means something very specific and important to a community of people. Maybe the best word to describe what I’m up to is evolution. I’m here to tell you that I’m evolving away from tennis, toward other things that are important to me. A few years ago I quietly started Serena Ventures, a venture capital firm. Soon after that, I started a family. I want to grow that family.”
Some of my most favorite and memorable financial planning work has been with clients transitioning to their next phase of career and life. I love painting “what-if” scenarios that incorporate dreams and life long goals. The new retirement planning now involves details like a change in income, bridging health benefits, the purchase of a new property or business venture. The typical 4% portfolio withdrawal rate, pension and social social security benefits are becoming less of the norm in the cash flow projections. Humans are also living longer so there are several phases to spending in the second half of life. We may earn some consulting income in the first phase, distribute for travel and leisure activities in the second phase, and move to retirement/ dependent living communities in the last phase. My favorite cookbook is called Six Seasons by Joshua McFadden. This cookbook highlights what most farmers know that chefs often forget. If we want to cook what is in season, we must understand that summer is actually 3 seasons based on plant production. This fourth season is the bountiful season, so we must recognize it as more than one phase, in fact, in measurement of bounty, it is perhaps half of the year’s crops. Wouldn’t it be wonderful to think of the second half of our lives as bountiful!
We are enthusiastic and excited to strategize and plan for all phases of your evolution. We encourage you to think differently about your possibilities in life. Be Bold. Love Your Life!
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Brandon R. Cabaniss, CFP ®
Private Wealth Manager