Like most Americans, you’ve probably spent years working to achieve the retirement of your dreams. There comes a point when this milestone changes from a distant goal to an imminent reality. You can make your first year away from work more rewarding and less stressful if you anticipate potential challenges and prepare for how you will handle this life change.
Your State of Mind
As a new retiree, it’s normal to feel both excitement and trepidation. You’re eager for more time with friends and family, and for the activities you love. Stepping away from your career can reduce stress levels and free you from competing priorities. However, saying goodbye to your workplace may also trigger anxiety and sadness.
If your spouse or significant other is already at home, your new lifestyle may cause similar emotions for him or her. The change would mean a departure from both of your schedule and habits, even if it means more time together.
For those experiencing mixed feelings, it’s helpful to acknowledge them, remind yourself why you chose to retire and remember all you accomplished to reach this point.
Your Purpose
With your calendar clear of work obligations, it’s important to identify a few ways to fill your time. To start, keep the commitments you’ve made about what your retirement will include. If you’ve promised distant relatives that you’ll reconnect, then organize a reunion. Alternatively, you may decide to pursue an encore career, part-time job or an opportunity to open your own business.
With all your new possibilities, it’s important to avoid overcommitment. Give yourself some breathing room each day and ease into volunteering or new activities. Now that you have the freedom to do so, be sure that you’re choosing to spend your time in ways that are most gratifying to you.
Your Finances
Adjusting your mindset from building your nest egg to spending it can be challenging. To make your initiation to retiree life easier, create a plan for paying yourself in retirement. Start by tallying your income sources before determining which ones you’ll tap into first. Next, estimate your cash flow for year one. Planning this in advance can help ease worries and reduce your risk of overspending. As a benchmark, have enough cash to cover three years of potential unexpected expenses. Once you’re in retirement, monitor your cash reserves regularly to gauge your spending and make adjustments as needed.
If you’re uneasy or need reassurance that your income and cash flow plans are sufficient, meet with a financial advisor. Together, you can look at the impact of taxes, evaluate your portfolio diversification and prepare for the legacy you’d like to leave your community and family.
Becoming a retiree means enduring a lot of change. Although you can’t prepare for every challenge you might face in your first year, planning for what you can control will allow you to move into this new life stage with confidence.
MICHAEL W. K. YEE, CFP
1585 Kapiolani Blvd., Ste. 1100, Honolulu HI 96814
808-952-1222, ext. 1240 | michael.w.yee@ampf.com
Michael W. K. Yee, CFP®, CFS®, CLTC, CRPC®, is a Financial Advisor,
Certified Financial Planner ™ practitioner with Ameriprise Financial Services Inc. in
Honolulu, Hawai‘i, with Na Ho’okele Financial Advisory Team, a financial advisory
practice of Ameriprise Financial Services Inc. He offers fee-based financial planning
and asset management strategies and has been in practice for 29 years.
The Pay Yourself in Retirement study was created by Ameriprise Financial utilizing
survey responses from 1,305 Americans ages 55 to 75 with investable assets of at
least $100,000. The online survey was commissioned by Ameriprise Financial, Inc.,
and conducted by Artemis Strategy Group from November 16–22, 2015.
Investment advisory products and services are made available through Ameri- prise
Financial Services, Inc., a registered investment adviser.
Ameriprise Financial Services, Inc. Member FINRA and SIPC
© 2016 Ameriprise Financial, Inc. All rights reserved. File #1438828
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