Retirement Transition: Living Your New Life

Retirement Transition: Living Your New Life

by A. Scott White, CFP®, ChFC, CLU


After years of success in the workplace, you’re finally retiring. Your retirement has probably been carefully planned and anticipated, especially in the financial arena. During your working life, chances are you checked your retirement savings plan on occasion to determine its consistency with your long-term goals. Now that you’re retired, the first five years will require ongoing evaluation and, potentially, adjustments.

Retirement (also known as the asset distribution phase) may be longer than you’d originally anticipated. Better healthcare and longer life spans mean you could spend up to one-third of your life enjoying retirement. As a result, your retirement portfolio will need to cover a longer time frame. To keep your retirement income flowing, it’s important to check your budget regularly (monthly or quarterly) to ensure you’re not overextending yourself. Being adaptable and flexible with your budget is vital to a successful retirement.

Another recommendation is to separate short- and long-term expenses. Making clear distinctions between needs and wants will also help prioritize spending. In addition, avoid acquiring new debt on purchases if you can save for the item instead. By saving for big-ticket items like new cars or major appliances, you keep your debt down and don’t risk compromising your standard of living. Finally, keep in mind that you may owe income taxes on pretax contributions and any earnings when you withdraw assets, depending on your type of retirement savings. As a result, you may not have as much money to spend as your withdrawal amount indicates.

Obviously, your goal is to ensure your retirement assets last for as long as you need them. Holding a percentage of your retirement savings in equities is one way to potentially reduce the risk that inflation will adversely impact your portfolio. Many financial experts advocate adjusting allocations–both before and after your retirement date. For example, equities may be 55 percent of your portfolio at age 65, and 35 percent at age 80. Another aspect to remember is the order of returns, not just their averages, and how that can affect the longevity of your retirement assets. If returns perform poorly during the initial period of your retirement, you could easily deplete your retirement savings.

Furthermore, you’ll want to anticipate unexpected events that could potentially impact your financial picture. If you discover your retirement “housing” is exceeding your budget, you can move to a place that is less expensive and easier to maintain. The profits from a sale can then be added to your reserves. You may also want to consider long-term care (LTC) insurance. LTC insurance helps cover nursing home costs or assisted living. The earlier you begin purchasing LTC insurance, the more reasonable the premiums.

Whatever your retirement plans, consulting with a knowledgeable professional like a CERTIFIED FINANCIAL PLANNER™ practitioner is a wise decision. An experienced professional can help you ensure your retirement meets your goals and desires—from initial investments to fine-tuning your finances during retirement.

Scott White is past president of the Financial Planning Association Southwest Florida Chapter. He is past president of the Southwest Florida Chapter of the American Society of Financial Service Professionals, past president of the Lee County Estate Planning Council, and founding president of the Planned Giving Council of Lee County. For more information, visit www. or call (239) 936-6300. Scott White Advisors is an independent Registered Investment Advisor and is located at 1510 Royal Palm Square Boulevard, Fort Myers, Florida 33919. Securities offered through Raymond James Financial Services, Inc., member, FINRA/SIPC. Certified Financial Planner Board of Standards Inc. owns the certification marks CFP® and CERTIFIED FINANCIAL PLANNER™ in the U.S.