Impact – Wealth Management


Financially and Mentally Preparing for Retirement

For the last 15 years I’ve helped somewhere around 100 couples transition into retirement. The decision to retire is obviously one of the most important financial decisions that you will ever make. You will say goodbye to your income source and live almost entirely off of what you’ve saved. That’s a huge leap!!

What I’ve found is that while most of my clients are on track to retire FINANCIALLY, far fewer people are ready to retire EMOTIONALLY. Retirement is a huge life change that encompasses so much more than just finances.

Mentally Preparing for Retirement

About a year ago I took a year off to regroup and plan the birth of Impact Wealth. Even though I had been dreaming of a sabbatical I found out quickly… it is HARD to not go to work everyday!

For years my clients have told me this same thing and I THOUGHT that I understood, but when you walk a mile (or a year) in their shoes, you become more acquainted with the struggle.

I’ll be honest, I struggled a bit with depression when I first left the workforce. Even though my particular situation was unique, the onset of depression is not. A recent study in the UK showed that self reported depression went up 40% in the first years of retirement.

I knew that I would be going back to work, and I had the plan of Impact to keep a fire in my belly, but figuring out the day to day was a struggle.

For so many of us “hard chargers” we have thrown ourselves into our jobs, not realizing how much of our sense of purpose and well being came from our career accomplishments.

Here are the tips and tricks I discovered that kept me going

Make a list of all of the things that make you happy… not just the things that you enjoy or the things that make you smile, I’m talking about the things that you just can’t be any way but happy when you do them.

For me, the list was short… I think I started out with only one or two things but I kept a note in my phone and added to it when I thought of (or experienced) something that qualified.

Finishing a book

Being in the presence of children

Buying gifts for friends

Eating sushi

Taking a walk outside

Anytime I started feeling a little down in the dumps I would pull out my list and commit to doing one of these things.

Make a checklist of healthy habits.

One of the beautiful and terrible things about “retirement” is that you give up your routine. Our brains tend to automate as much as they can which means that they tie one activity to another.

For instance, for YEARS I got up, made myself a green tea and took my vitamins (some people have coffee, I have green tea). When I didn’t have to get up in the morning I didn’t always make a green tea and so I started forgetting to take my vitamins.

I realized there were quite a few things that were accidentally missing from my life due to my lack of routine. So I made a “Daily Checklist” and put it inside my planner.

  • Vitamins
  • Devotions
  • Journal
  • Essential Oils
  • Read non-fiction
  • Read fiction
  • Exercise

This checklist was helpful on several levels.

Besides just helping me be sure to get these healthy habits worked into my day, a checklist is a wonderful tool to deliver dopamine to our brains.

Dopamine is a reward chemical that actually improves our memory, lowers our blood pressure and has all kinds of other great health benefits. (Click here for more details)

Every time you check something off a list, your body rewards you with a little bit of dopamine! So a health habits checklist is definitely a WIN WIN!

Get intentional about relationships

When you leave the workforce you likely leave behind a lot of friends. Coworkers and in my case, clients had become very good friends over the years.

When you’re working together with someone you’re essentially forced to spend time together and so those work relationships blossom. When you leave the workforce you have to get really intentional about the relationships that you want to keep.

Now, hopefully this is NOT true of you, but what I found was that because I had such strong work friendships I had inadvertently ignored many other relationships that were important to me. Friends who had been very close at one point in my life I hadn’t spoken to in months… or years.

I made another list.

I wrote down all of the people that were important to me. All of the people who I wanted to be intentional about creating and maintaining a relationship with.

Once I had my list of people I started to think about what I know is important to them in their lives and I made a plan of intention.

  • I did small things like mail a card or shoot off a short text and I did some big things that took more planning.
  • I took a road trip with my husband.
  • I made a quilt with my mother-in-law.
  • I attended a play with a new friend.
  • I sent one of my favorite books to an old friend.
  • I took my son on a sushi date.
  • I took my niece and my little brother to the Kirby Science Center.
  • I bought my oldest boy laundry soap and paper plates and delivered them to his apartment.

Every week I looked at my list and every week I asked myself “which relationship needs some watering? How can I be intentional with the people that I love?”

Limit Social Media and News Consumption

Holy Moly. It is so easy to be consumed by news and social media. When I left the workforce it was right in the middle of the Russian invasion in Ukraine. So naturally I watched the news… a lot.

If you’re an avid watcher of the news, start paying attention to how you feel before and after watching the news. You almost never turn off the tv thinking to yourself “I am inspired! I want to go and be a positive productive human.” The news is selling fear and it sucks the life right out of you.

What I quickly learned was that I had to limit my consumption of news. I limited the source of my news and the time that I spent consuming the news.

Thirty minutes was more than enough time to get caught up on the events of the day. I read news summaries instead of watching stories unfold in real time.

I was far less anxious and generally a lot happier when I learned this discipline.

Learn a New Skill

There are SOO many wonderful learning opportunities out there thanks to the power of the internet.

I learned to paint with watercolor from a program called “Lets Make Art

I took an Economics class by Paul Krogman and learned the “Art of Negotiation” by Chris Voss thanks to Masterclass. For around $180 a year Masterclass gives you access to beautifully produced classes on ALL KINDS of topics… from cooking and wine appreciation to communication and real estate.

Many Ivy League schools have FREE online programs. Of course if you want credit for taking the class you have to pay, but if you just want to learn, check out this list of free course offerings.

  1. Find Ways to Give Back

There is nothing better than to positively IMPACT someone’s life. And there’s no faster way to clear the blues than to turn the focus off of yourself and on to someone else.

  1. Volunteer with a local organization that works on something you’re passionate about. Volunteer Match is a great resource for finding opportunities in your area. Click here for a great site that helps match people to volunteer opportunities in your area!
  2. Pay for someone’s meal.
  3. Give a big tip to an overworked waitress
  4. Withdrawal $100 from your bank and go on a mission to find someone to give it to

I have made it my life goal to “Everyday, Impact 1”. Here are 101 Ideas of Random Acts of Kindness you can do any day… or everyday! 🙂

Financially Preparing for Retirement

Don’t try to make a list of all of your bills and call this your budget.

Many times over the years clients will come in to my office with their budgets. They have all of their utilities, insurances, loan and lease payments, and an estimated amount for groceries listed out on a spreadsheet. “I don’t see eating out, car washes, manicures, etc. on this list?” I say. They add “$200 misc” to the bottom and feel confident their budget is “pretty accurate”. Unless you’ve been living by this budget and limiting your expenses to what is on that page, this method is the recipe for disaster.

Track expenses for one year

My general advice to clients is to track expenses for one year PRIOR to retirement. This doesn’t have to be a difficult process.

At the end of each month, download your bank statement/s, see how much went OUT of your account/s that month and write it down. Make sure you include any bank accounts that you pay bills/expenses from. Do that for one year.

At the end of the year, add up all of the expenses. This is likely a pretty accurate picture of what you are actually living on and what your projected retirement expenses will be in your first years of retirement.

Don’t remove anything that cost less than $10k from your expense calculation.

People often want to remove certain items from consideration. They say to me “but I bought a water heater this year and I definitely won’t have to buy another one of those next year” True, but next year it might be your washer or your refrigerator. Yes, we keep emergency cash for those things but emergency cash has to get rebuilt eventually too.

Unless it’s something really major (like you put a pool in your backyard or remodeled your kitchen), err on the side of leaving it in the calculation.

Your spending probably will not go down in retirement (at least not for quite a few years)

In all of my years of advising people through retirement I saw very few people whose spending went down the year after they retired. You THINK it will, but that’s not typically how it works. Yes, some expenses go away but you usually pick up new expenses in other areas.

It might surprise you how much you’re spending.

It’s often surprising how much it actually takes… but just because it’s hard to believe doesn’t mean that you shouldn’t believe it. People are often in a little bit of denial when they start tracking their actual expenses. They will say “I KNOW we don’t really spend that much. I KNOW we can make it on less.”

The only way to be sure that you can make it on less is to do it. I recommend living on less for another year or so to much sure that you can do it successfully before you put yourself in a situation where its do or die.

Try out your new budget BEFORE you retire.

Hopefully you’ve worked with your financial advisor to come up with a retirement income plan that can provide for all of the money that you’re spending. If your retirement income can’t quite support your spending needs, my advice is to take a year and try living on the reduced income before you retire.

Retiring and being forced to reduce spending at the same time can be difficult.

If you plan for retirement success both financially AND emotionally, find a good financial advisor to walk with you and surround yourself with all the people you love, retirement will truly be the best years of your life!

Impact Wealth Management LLC is a fee-only Registered Investment Advisor (RIA). We are based in beautiful Sioux Falls, SD and regulated by the State of South Dakota. Throughout this site, we went out of our way to present unbiased data believed to be from reliable and respected sources. However, its accuracy, completeness, and relevance are not guaranteed and no responsibility is assumed for errors or omissions.

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