Retirement - Part 4: Overcoming Roadblocks

When it comes to retiring, some people have been waiting for years and are well prepared for it both financially and emotionally. But, there are many others on the cusp of retirement who are troubled by doubts, questions and uncertainties. That’s where Spectrum Financial Services can help.

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At Spectrum Financial Services, we understand the emotional conflicts, financial concerns, and practical questions that accompany this stage of life. No life transition is simple, and retirement is no exception. That’s why we put together this series of articles —to help you sort through the complexities and to address your concerns. Be sure to check back frequently to learn information that can help guide you down this new lifestyle journey. We want to teach you how to retire.

Articles in this retirement series include:

  1. Imagining the Possibilities – Examine your personal characteristics
  2. Gathering the Financial Facts – Get a clear picture of your net worth
  3. Life’s Other Realities – Health concerns and family responsibilities
  4. Overcoming Roadblocks – Financial and personal strategies
  5. Transitioning Into Retirement – Steps for a smooth transition
  6. More Help (valuable resources for prospective retirees)

In our previous article, “Life’s Other Realities – Health Concerns and Family Responsibilities,” we discussed issues you may face beyond your financial statement, such as health, caring for a spouse or other family member, and changing relationships. The next section will address the three most common retirement roadblocks that you may encounter on the road to retirement. The professionals at Spectrum Financial Services want to help you identify and address the concerns you may have along this new life journey so you can structure your retirement accordingly.

Overcoming Roadblocks

Most people enter their retirement years with one or more of these challenges: the financial challenge, the spousal challenge and the “stuck in a rut” challenge. At Spectrum Financial Services, we don’t only help you understand your retirement income and determine an appropriate retirement age. By spending a little time with the professionals at Spectrum Financial Services, you can avoid these roadblocks, change them into opportunities, and enjoy a smooth retirement.

THE FINANCIAL CHALLENGE 
You have listened to your financial planners’ advice and completed a cash-flow projection only to find that your expenditures might exceed your projected income if you were to stop working all together. Now what do you do? Retirees basically have two options: continue to generate an income stream and/or cut expenses.

Many people who realize they may still need some income in retirement decide to continue working in some capacity. Here are a few ways people restructure their workdays to accommodate this new stage in life.

  1. Develop a more flexible way of working at your current job. It is still cheaper to maintain and utilize a current employee’s skills than to have to recruit and hire new employees.
    • Speak with your boss about offering flexible work hours or performing work from home.
    • Offer to act as a trainer or mentor for new employees so your skills continue to benefit the company.
    • Volunteer to be a part of a temporary workforce if your company has seasonal work or needs additional employees during high volume production time.
  2. Work full- or part-time in a new, exciting field. This is your chance to start something new: be an ambassador for your community; play the piano at your church; officiate sporting events. You may not get paid as much as you did in your previous profession, but choose something you love and you’ll not only help fill both the financial gap as well as the emotional gap you may experience.
  3. Start your own small business. This venture can be based on a hobby or on a skill that you’ve developed over time. (For example, if you were worked in the human resources department at your prior job, perhaps you could advise people on setting up resumes.)
  4. Sign on with an Executive Temping Agency. Many employers use temp agencies to fulfill employment needs. For you, temporary work allows you flexibility in the types of jobs you accept and when you accept them.

If continuing to work doesn’t appeal to you, or if you are not able to work, there are ways to enhance your income stream. This may be a good time to re-examine your investments. Call on the professionals at Spectrum Financial Services to help you look at your income and expenses and to gain a different perspective of your investment income. You always have choices when planning for your retirement.

Decrease Expenses 
Let’s take a look at the other side of the picture: cutting expenses without cutting back on your enjoyment in retirement.

  1. Take advantage of senior discounts. More and more businesses are offering discounts for seniors. Use them! Show your age and save on everything from hotel rates, movie theater tickets, pharmacy purchases and restaurants, to name only a few.
  2. Rent your house while you are away. Let friends, family and neighbors know that your home is available to rent on a short-term basis while you are snow birding in the south or taking an extended vacation. This extra income can come in handy, and it’s easy!
  3. Save on auto insurance. Courses are offered by AAA or AARP, which can save you money on your auto insurance premiums.
  4. Dine out for less. Many restaurants offer smaller and cheaper options on their lunch menus, often 20-30% below dinner prices. If you do go out for dinner, consider splitting an entrée. You’ll not only save money, you’ll save calories!
  5. Borrow, share and upload entertainment. Retirement is a great time to re-discover your local library. In addition to books, most public libraries today offer CD and DVD collections, so you don’t need to buy music, movies or books anymore! You may also want to establish a trading system with friends or learn how to download your favorite entertainment onto a tablet, iPod or MP3 player.
  6. Tighten your belt on gift giving. Although you may be tempted to spoil your kids and grandchildren with gifts, consider waiting a few years before you unleash the giving. This will give you a chance to assess your spending patterns and needs. If you do choose to give elaborate gifts in the early years of retirement, try using current income to make the purchases rather than investment money.
  7. Review Your Living Situation 
    If continuing to work doesn’t appeal to you or isn’t an option for you, there are other ways to help you find balance income and expenses.
    • Selling your home and downsizing. This may be an opportune time to re-evaluate your living situation. It may be possible to bring expenses down by selling your home or using the equity in your home to downsize to a smaller house, condo, or senior living association. Usually, these options will decrease or eliminate the maintenance work (lawn care, snow removal, etc.) you currently have.

      Perhaps moving out of your home isn’t enough…you may consider moving to a different part of town or the country to accommodate your new stage in life. Whether you move across town or around the world, be sure to check out the area you’re considering, including crime rates, health care, taxes, weather, etc. While it’s important to understand your finances, it is equally important to feel comfortable in your living space.
    • Renting instead of owning. Although many long-time homeowners may not consider renting a home a viable option, a cash-flow analysis of renting and buying may prove otherwise. Work through the numbers with your financial planner.
    • Trading up. If you are fortunate and aren’t concerned about your finances, you may consider buying the house you’ve always wanted. A bigger home will provide extra space for children, grandchildren and visiting friends and family. A larger house also allows you to maintain all of your possessions and perhaps even a higher standard of living.

THE SPOUSE CHALLENGE 
It is normal for spouses or partners to have different views about retirement life and the future. These differences can lead to stress for one or both spouses. Studies show increased levels of conflict when one spouse is retired and the other continues working…and even greater when the wife is working and the husband is at home.

To avoid confrontation, it is especially important for couples to collaborate and consider both sets of goals rather than individual wishes. The transition into retirement presents an opportunity to work together to satisfy the individual desires of each individual. Among the strategies that will help ensure collaboration:

  1. Make individual lists of dreams. Keep notes on the things you’d like to do in retirement, people you’d like to meet, philanthropy projects you want to work on, etc. Next, find time to share and discuss your lists together. Usually, couples will find that many of their individual goals overlap with their partner’s.
  2. Respect and give consideration to each other’s point of view. Put yourself in the other person’s shoes and try to relate to their wishes.
  3. Focus on the big picture. Ask lots of questions to help you understand your partner’s desires. If your partner wants to volunteer for a particular cause, take time to learn about the organization so you can have meaningful conversations, get involved yourself, and maybe even share in the success of the organization’s mission.
  4. Evaluate your proposed solutions. Now that you’ve written down your ideas, consider their long-term consequences and outcomes. You may also want to prioritize the list so you can start checking off your retirement wish list.

THE STUCK IN A RUT CHALLENGE 
Retirement is different for everyone; but, that doesn’t mean you have to go into this new life stage alone. It’s up to you to ask a lot of questions, observe others in their retirement lives, and seek financial help from professionals who can guide you along the way. Have a vision of what you want your retirement life to look like, and then go for it!

One exercise that may help you visualize your retirement is to write down retirees that you admire. These people could be famous (George Bush or Colin Powell) or somebody closer to home. Then, take time to learn more about them. Some questions to consider include:

  • What they are doing in retirement that makes them happy?
  • If they have a spouse or partner, how do they effectively communicate with their spouse or partner?
  • Do they still work, or have they changed their working positions?
  • What would they do different to make retirement better?
  • What activities are they involved in that stimulate their mind?

For those people on your list that you cannot reach out to, read books and biographies about them. Find out what makes their retirement life successful.

Another way to stay out of the retirement rut is to be aware of and knowledgeable of current events, activities, trends and technology. Take time out of your day to socialize with others and observe what other retirees are doing to keep their bodies and minds active.

The financial professionals at Spectrum Financial Services want to help you set goals and formulate strategies for this next stage of life. You can count on our professionals to:

  • Identify goals and set attainable objectives.
  • Suggest ways of managing debt.
  • Provide ways to help preserve your principal and generate income.
  • Act as your personal financial coach to raise your level of involvement and confidence.
  • Provide useful options for sudden gain (e.g., inheritance or sale of property) or sudden loss (e.g., market downturn, loss of job).
  • Narrow a list of investment options down to the ones that will be effective for you.
  • Provide tools to monitor your investments more easily.
  • Help you develop an investment plan that implements strategies based on your goals.
  • Spur your thinking on ways to make retirement a rewarding time of life.

RETIREMENT…TO BE CONTINUED

 

Be sure to return to the Spectrum Financial Services website www.sfsplanners.com to read the next article in this series, “Overcoming Roadblocks.”

If you want to get started right away with your retirement discussion, you may contact the investment professionals at Spectrum Financial Services by calling 515.255.3306, e-mailing us: info@sfsplanners.com, or visiting our website at www.sfsplanners.com

Advisory services offered through Legacy Financial Group, LLC d/b/a Spectrum Advisory Services, a Registered Investment Adviser. Securities offered through Broker Dealer Financial Services Corp. Member FINRA &  SIPC. Broker Dealer Financial Services Corp., Legacy Financial Group, LLC, and Spectrum Financial Services are not affiliated companies.

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