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The Secret to Retiring Well
"Retirement at sixty-five is ridiculous. When I was sixty-five I still had pimples!" --George Burns

Retirement is a modern concept. It was Otto von Bismarck, first Chancellor of the German Empire (pre-WWI) who invented financial retirement for German citizens in 1889 to make room for new younger workers as the German economy began its Industrial Revolution. This was such a great idea it was copied around the world. In fact, most of us look forward to the time when we don’t “have to work” any longer.

But SHOULD one retire? Recent research suggests a cautionary approach. Simply “retiring FROM” work without “retiring TO” something can create health issues, depression and anxiety, even early death!     

Researchers from the University of Michigan School of Public Health analyzed data from nearly 7,000 individuals over 50 years old and concluded that “stronger purpose in life was associated with decreased mortality.”

In a May 2019, Ephrat Livni discussing the University of Michigan results, writes: “In fact, people without a purpose were more than twice as likely to die than those with an aim and goals. Purpose proved to be more indicative of longevity than gender, race, or education levels, and more important for decreasing risk of death than drinking, smoking, or exercising regularly."

In my role as a financial advisor, I have helped many people with this question. Here are some examples of “retiring to.”

Forced Retirement
Sometimes we aren’t given a choice. Health concerns or loss of position are two main reasons. It’s crucial to have a sound financial plan (savings, pension, contribution plan balance) to make it through a longer retirement period.

I met with Roger several years ago. He’d been battling virulent cancer. He and his wife were surviving, but the cost of treatment was staggering. He’d just qualified for Medicare and Social Security Disability benefits and I was there to help him choose a Medicare supplement plan. His illness had wiped out their savings and his wife had to return to work when his long term disability benefits ended from his last job. He was only 55 years old and required a walker to move around. His list of prescriptions took up two handwritten pages.

This couple waited too long to do a financial plan. Disaster struck and they’re still reeling financially. Fortunately, he built up a following working for a major Christian publishing company. While his health condition kept him from a “regular” job, he could write periodically which helped defer some of the expenses. This supplemental income was important, but I believe more critical was that his writing gave him purpose. He lived for a total of 5 years past his diagnosis.

Purpose is important. Though the choice was not theirs, Roger found something worth "retiring TO," which made all the difference in his final years.

I Got a Windfall!
Companies make changes. New business opportunities or changing cost structures mean workplace reductions, for example. To ease the transition some companies offer “packages” to entice older (read as “more expensive”) employees to retire. This is an excellent opportunity to pick up a nice bump in retirement savings.

Les worked for a power cooperative in Colorado. At 60 the rules changed and he got a nice incentive to retire. Coupled with a market run up in the value of his 401k, his retirement savings doubled over the course of a few years. The increase in his nest egg allowed him to retire, buy a 60-acre property in Montana and begin working on his own ranch. He and his wife are busy raising chickens, horses and improving on the property.

When opportunity knocks, we should answer! But finances alone are not enough--Les found something meaningful to "retire TO."

This Job is...
Fill in the blank. After a long career you want to rest. Or you’re bored. Or you just don’t like doing that work any more. Or you don’t like the people. It’s time to try something new and different.

Kalika is an expert in healthcare business. She worked her way up high into the ranks of hospital administration. She ran a team that helped hospitals stay compliant with regulations, and she also improved efficiencies. Unfortunately, her effort and success was not recognized by leadership. In fact, a difficult boss created a very unpleasant work environment. Subjected to high stress, 50-70 hour work weeks, sleep loss and no time for stress relief (vacation, work outs, etc.), Kalika was frustrated with no prospect for improving her situation. The thought of starting over in a new position wasn’t appealing either. She wondered if it was time to retire.

Fortunately Kalika did a fantastic job saving for retirement, investing wisely and eliminating all debt. Her lifestyle was such that she did not need her well-paying but frustrating position to pay the bills. She retired at age 64 and began to pursue her lifelong passion of art and painting! (You should see her work! Don't worry, she gave us permission to use her real name.)

Family Ties
Spending time with family can definitely help fill the purpose “void” once one stops working. In Seven Habits of Highly Effective People, Stephen Covey writes that no one ever says, “I wish I’d spent more time at the office” on their death bed. Instead it’s always, “I wish I’d been a better parent (or friend, sibling, son, daughter, etc.)”

I REALLY want to be grandparent! Unfortunately my adult children aren’t even married yet. I’m threatening arranged marriages for them. I eagerly imagine spending a lot of time with my future grandkids! And, like every grandparent, I plan to spend some money on them, too! However, I will have to take care to stay within budget.

I tell all our firm’s clients that my job is to remove emotion from financial decisions. Clients rely on me to give them facts. However, I am not without empathy. I understand this emotion to provide for family. It is occasionally my duty to inform folks that their financial situation is growing worse, and getting control of a budget is a key piece of taking care of family long-term.

Bottom Line
"The best time to start thinking about your retirement is before the boss does." —Author Unknown

If Otto von Bismark were alive today I think he’d be shocked at what “retirement” has become. He worked in politics until forced from office at age 75. He spent the next 8 years writing memoirs and thumbing his nose at the German aristocracy. He is considered one of the worlds’ best modern diplomats. Clearly he didn’t “retire” quietly. He exuded purpose and active living until succumbing to illness in 1898. Bismark found something meaningful to "retire TO."

Our firm does a great job with the numbers. We can talk financial “shop” with the best advisors around. What separates us from the pack is our concern for client well being. It’s not just about having enough money, but having enough living with the money.

We can help with the numbers, but only you can find something worth retiring to.

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(972) 410-6623
It is the policy of Bright Wealth Management, LLC (“Bright Wealth Management”) that we do not disclose any nonpublic information about our clients to anyone, except as permitted by law. Bright Wealth Management restricts access to personal and account information to those employees who need to know that information in order to provide products or services to our clients. Physical, electronic and procedural safeguards are maintained to guard clients’ non-public personal information.
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