Finding the ‘why’ behind your retirement plan

You may have seen the bumper sticker “We are spending our kid’s inheritance” — or may even have it on your own vehicle.

You probably have also heard the phrase “I am going to slide into the grave, write my last check and have it bounce.”

While I appreciate the levity and an opportunity to chuckle, as a Certified Financial Planner, I also understand the vast complexities of all the moving parts of the distribution, or “fall season” of your wealth.

How do you manage the uncertainties inherent in your fall season? Assets must be nurtured and grown, even in the distribution phase. Unlike the accumulation phase, there are very different aspects of your waning years that you need to acknowledge and diligently manage.

Consider these:

• Longevity ambiguity – Make the most out of each day

• Reduced earnings, either by choice or ability

• Potential spending constraints based on sources of income

• Unforeseen spending shocks

• Lifestyle and health care inflation variants

• Declining cognitive abilities

My husband recently left teaching and is in the process of “rewiring”. We turned on his pension, and are ourselves, working through our “why” and “how” questions.

Here’s where the value of “why” comes into play.

Why would you want to nurture and grow your financial resources as you move through your retirement years? I will caution you that it needs to be more than just building bigger barns for the sake of having more, or in thinking that more money is the path to happiness.

Research is showing — and what I have personally experienced — is that it is how you use your money as a flow of your values or intentions that will bring you increased joy and happiness.

What is your why?

Do you want to build margin into your financial life to take advantage of opportunities or provide liquidity for emergencies?

Do you want to minimize your future dependence on family for providing long-term care?

Do you want to create wealth in order to invest in family endeavors or organizations that are important to you while you are living?

Do you want to assist family members for their future goals such as funding advanced education for grandchildren?

Do you want to create a financial legacy once you have passed?

Do you want to be part of the co-creation process to impact the world for good? You can use your time and your money to focus on solutions you feel are important.

You can invest in the stocks and bonds of companies that produce goods or services that reflect your values. You can create meaning with your money past just being the security on a financial statement — you can invest it to impact the world around you and improve the weaknesses in our society and the injustices suffered by the innocent.

If you do want to slide into the grave writing a bad check, what are the parameters you need to contend with?

Now that you have your “why”, you can turn to looking at the “how” to foster growth.

• Eliminate consumer debt – You cannot borrow your way to prosperity and peace

• Pay off mortgage debt before you retire if you want to age in place

• Inventory all of your financial assets

• Discern which assets to employ for each of your “whys”

• Maximize the opportunities within each asset as you move through different economic and life seasons.

• Optimize that taxation implications of each tool for cash flow

• Embrace contentment and gratitude

• Create a trusted network of advisers and family members

When you work on your “why” before your “how”, you will create intention and mindful behavior with your money and maximize your opportunities for living a life without regrets.

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