Want to finally stop working and retire in peace. It's about more than quitting work and living off your savings in retirement reimagined. You'll discover how to have a fulfilled retirement that lets you enjoy travel, family time and freedom. And now here are your hosts, Ron Bernstein and Nicole Sullivan.
(00:23): Hello and welcome to retirement reimagined. My name is Nicole Sullivan and I am a financial planner and the co-founder and director of financial planning at prism planning partners. And today I am joined by my partner and the managing member of our firm, Ron Bernstein. Hi Ron, How are you, Nicole? Doing great. Doing well. It is extremely sunny and extremely hot here in Illinois All time. I know. Yeah. Well deserved. Yeah, too.
(00:55): Yes. Just very excited today. I mean, this is another great topic that I'm excited to delve into, but believe it or not, this is our seventh episode, so we're, It's so great. Yeah, we're building some momentum here and I'm really excited. This is working out. Yeah. We're getting a little rhythm going. I'm really excited. What's interesting is I keep saying it's hot and summer's heating up. The markets are heating up. We're not gonna talk about market volatility today. That's actually our next episode. But I do think that market volatility is definitely one of the factors that can influence the topic of the day, which is course correcting a retirement.
(01:31): If you look just the last two years, especially during the pandemic, we saw record numbers of people retiring early, especially in that 55 to 64 age group, recent labor data coming out in may. Uh, we've started to see a little bit of shift of folks in that age bracket, going back to the workforce. And we've seen some people who wanna stay retired, you have to make some changes in the way they're living, whether it's gonna be permanent temporary. We'll wait to see, but we'd just like to get a talk going about why some people might have to course correct in their retirement plans and, and how do they get help?
(02:03): Okay. So let's just jump right in. I wanna start off by asking why might someone have to course correct? And there's several reasons why the first one is that you may need to make changes to retirement or even reenter the labor force for financial reason, market volatility. And the return of inflation are really hot topics. And they've been on many retirees minds, many pre-retirees minds. And so this is where it's important to get your financial assumptions, correct. Before you enter retirement, it's really about having a good handle on what income sources will be coming in and what will be going out, what your expenses will be. And then also evaluating the, what ifs that could impact your plan.
(02:51): And I think that for some people, retirement is starting to get course corrected because they made incorrect financial input before ex exiting the, uh, workforce. And this is of nobody's fault. I mean, we, we live in very volatile times and markets can demonstrate that as they are currently. So we underestimate a lot of things with the power of inflation or, uh, getting a little too lofty on some of our return assumptions that are now being deemed unrealistic in today's world. I mean, inflation, hasn't been a topic that people have discussed since the eighties, 40 years it's rearing it's ugly head It? It is. And we've seen little bits in, in starts of it. But right now it is becoming a lot more pronounced and we won't really have to delve into the specifics of why that's happening. But we here, we find ourselves in a very hyperinflationary period right now, and it it's causing some disruption, not only in the economy, but how assets are valued.
(03:49): And I'll say kind of on that point too, we, human beings have short attention spans and it feels like, especially in the past three years, we've forgotten that markets don't always go up. People have maybe forgotten about 2008 and how truly devastating that was for many, many folks and people thought the good times of the last several years would kind of keep on rolling forever. So my comment, I guess, to retirees is that it's important to remember when you're looking at retirement, you're looking at a multi decade period and you need to use multiple decades of market performance, cost, assumptions, inflation assumptions to influence your decisions. The past 10 years are just simply not enough.
(04:30): And there's a lot that goes into also uncovering what spending trends are like in retirement as you age, because as we've mentioned in prior podcasts, this is not your typical grandparents' retirement. You know, where they were just looking at a, a seven to 10 year retirement window today, we're looking at 20 to 30 years and spending habits will change materially during that Timeframe. Absolutely. They say the early years of the go-go years, and as you age, your spending potentially goes down or it maybe shifts folks in their eighties and nineties, aren't going up to dinner as frequently, often, or they're not traveling as often, but their medical expenses tend to be much higher.
(05:09): Yeah. So all that needs to be factored in and you, and I both know the importance of taking a long view on, on what's going on in their retirement. So getting back as well to kind of the initial question, why might you have to course correct a retirement? Another reason people opt to wanna make changes is because of a lack of structure. So whether that's boredom or maybe getting presented kind of an opportunity, that's too good to pass up. And I think it's extremely important to keep your brain active as you move through retirement.
(05:37): It's one of those situations where you just don't wanna underestimate the importance of keeping your brain active, like you said, and we frequently see that people retire only to return to the workforce, just cuz of the lack of things to do. Uh, we work hard obviously with a lot of our retiree clients in trying to create a dialogue around how they spend their free time just for that point. So they don't get bored and, and lose any kind of focus or purpose in their life. There's a lot of great opportunities. Yes. And we have a couple of episodes that really discuss how to combat boredom in retirement. I'll make sure to link to those in the show notes. So we've identified that this problem of needing to course correct or retirement occurs, what can you do to remedy a retirement gone awry? So Ron, what do you think people can do to potentially fix a retirement? That's not going as plans?
(06:24): Well, the first thing you have to do is ask yourself, what do you wanna do with your time? Or maybe even better? What do you have to do? Unfortunately, there's really no financial constraints. Uh, hopefully if you've done your work properly on, on that side, but if you haven't then obviously not saving enough is, is an issue, but let's not go down that rabbit hole right now. But that's probably where I see the, the first thing that I know some people struggle with is, is they just don't feel confident enough in their finances to be able to sustain what they originally thought was a plan.
(06:54): And I think returning to the workforce can be a compelling choice. And I don't want to downplay that, especially for younger retirees. We've seen, especially during this pandemic, that many folks opted for early retirement, between 55 and 64. And they're just finding that they're kind of bored. They have energy, they have a lot of things that they want to do a lot to give. There's nothing. There's no shame in returning to the workforce after you've retired or even embarking on a new career When you're talking about potentially living well past your nineties, which we've already identified as a possibility, that's a long time horizon, Right?
(07:33): To, to have to, to figure out what it is you wanna do. And I'll be truthful here as well with birth rates down. And what's going on in the world today, working longer is, is good for society and our economy. So I, I think that's, and the fact is, is that a lot of these retirees are walking out of a workforce that they have a good sound understanding of and their wisdom could be really well received back in the workforce when they're ready.
(07:57): A resource that I know that we like to reference a lot is the MIT age lab. And what this is, is a research arm of, uh, the Massachusetts Institute of technology that started conducting research and reports on longevity, aging and all kinds of things, retirement. Um, they helped the financial advisory community a lot because obviously we're talking about retirement with people all day, every day, and a recent Forbes article that the MIT age law lab blog, say that five times fast cited was basically called. What do you wanna be when you grow up targeted for that kind of late fifties, early sixties age group, I'll say to this article below, but the gist of the article is that we frequently ask teenagers recent college grads. What do you wanna be when you grow up? But we really should be asking that of ourselves as we get older, as we move through our fifties and sixties, most, especially since lifespans are getting more and more expended, Ron, as you said, there's, this is not your grandparents' retirement. And there's a good chance that at least one member of a 65 year old couple may make it to their nineties. So is it potentially worth utilizing your skill set, utilizing your energy to embark on a new career path in your fifties or sixties? And I think the answer could be yes,
(09:18): Career is no longer a single plan profession. And, and a lot of that is actually just because the economy and skill sets have to evolve over time. And that does require that you constantly grow and change. And that means leading off of your formal education or professional experiences or personal passions, but it's really always staying flexible and making sure that as the world turns, as we say, you need to turn with it. That's, what's really exciting. And, and I think the opportunity to go back into we reengage and, and looking at the economy and figuring out where you would fit into it, get your skill set up is a wonderful, wonderful segue into getting back into the world.
(09:59): And I know we've been stressing returning to the workforce. Some people just don't wanna do that. And some people don't have to do that. They don't have to earn a paycheck. So I wanted to maybe very briefly touch on how do you find things to do when you don't have to earn a paycheck and work is not a must. And that's really part of the journey that we're introducing here right now. And I know we have tools here at our a avail to help clients sort of formulate or visualize some of that to help them along that path. And I know we've introduced a previous podcast this wheel of life, but it does assist in, uh, helping, uh, raise awareness about your levels of satisfaction in your life on a myriad of areas. And maybe Nicole, if you want to touch on some of those, they're, they're really, really compelling.
(10:48): So what the wheel of life is, is a big wheel with 10 spokes, each representing different facets of life. So it could be community, family, life, inner growth, learning, things like that. And what we do with our clients is help them rate their levels of satisfaction on each of these spokes from a one to 10, a 10 being very far kind of out on the wheel, whereas a one being more close to the spoke, we ask our clients to connect the dots, to see how imbalance their life is. And if there's areas that are quite low, we like to brainstorm, how can we get some of these areas to be higher? And I think it's really cool to see what people have emphasized in the past and what they might wanna work on. And I, it, it's a great discussion point at least to initially see what's important and kind of maybe where you can be spending your time and energy, especially as you move into retirement and are looking for a little bit more structure.
(11:49): And really, I mean, the bottom line is it's just helping to reduce the possibility of making, uh, mistakes when you're looking to pursue other avenues. Once you're in retirement, this is just a great way to help sharpen the pencil and really kind of build a, uh, strategy around what is it that's really truly a value or important to you.
(12:10): This kind of gets to the final point we'd like to make here is that how can you get help? And what can you do if you need help course correcting your retirement? Our plug is obviously contact us as financial planners. We can help or any financial planner, but our profession can help with crunching the numbers, right? That's easy to do. That's black and white, but even if you are struggling with, how do I spend my free time? Am I assuming things correctly? Am I taking too much risk, too little risk? These are all things that we can do and have conversations around. And I also wanna talk about an activity that we are going to be making available to all of the listeners of our podcast, which is the weaken retirement planner. This is an activity that we do as planners with our clients in addition to the wheel of life that we referenced before. But what this does is helps illustrate what your ideal sample week and retirement might look like. So you get a blank calendar of mornings, afternoons, and evenings for seven days a week. And we challenge you to fill out how you'd like to spend every morning, afternoon, and evening. It can be really eye opening in addition to kind of seeing the areas of life that you value in our satisfied with to contemplate how you might course correct a retirement gone awry.
(13:29): And I think the visualization exercise such as this is a really, really powerful tool and it really helps our clients. You plan to prepare for retirement lifestyle that is satisfying and rewarding to them. So I, I think it's just a wonderful way to kind of mentally rehearse many of your retirement lifestyle options and decide which version is best for them.
(13:49): So I wanted to thank everyone for tuning into today's podcast. Ron, thank you so much for your time and insights. And if any, anyone out there is looking for some additional resources, I do want to point you to our website, which is prism planning, partners.com. We have a myriad of blog posts, activities, videos. I'm also going to make sure to link to the week in retirement activity, which you can feel free to download. And if you have any questions Ron, or I would love to hear from you and I'll make sure to include our contact information in the show notes. Thank you all so much. I really appreciate you taking the time to listen to us. Thank you, Nicole. I appreciate you. And uh, thank everybody who's listening. Take care. Take care. Bye.
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