Ep #24: Securing Your Retirement Parachute
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Full Transcript:
Benjamin Haas 00:03
Hi everyone and welcome to A/B Conversations, where we will help you CFP your way out of it. A podcast where you get into the minds of a couple of Certified Financial Planners on how we feel about everyday financial planning questions and what should really matter most to you. A healthier financial life starts...now. Welcome back.
Adam Werner 00:28
Hey, thanks for having me back.
Benjamin Haas 00:31
You're in the title. I gotta keep inviting you.
Adam Werner 00:33
For now.
Benjamin Haas 00:35
No, I'm happy to be doing this again. It is and I know, we've said it before, it's one of my favorite times of the week. So let's do it. I love this topic. I will say I think the ultimate title of this podcast probably needs explanation. So the topic today comes from a book that we both have recently read, Patrice Jenkins, "What Will I Do All Day", and those that are soon to retire, maybe have recently retired, in retirement and maybe kind of struggling with it, absolutely recommend it. Reach out to us, I'll give you a copy of the book. I would point to something she says in there is the title that people call retirement like jumping out of a plane and not knowing if the parachute is going to work or not and that's a crazy thought. I've never jumped out of a plane. I don't know if you ever jumped out of a plane?
Adam Werner 01:30
No.
Benjamin Haas 01:32
I can absolutely assure you that I would be one of those people that goes, "Are you sure this is going to open? Are you sure it's going to open? Are you sure everything's okay?" You need to validate that. So yeah, this resonates with us a lot of the work that we do financial advising, financial planning for people, we need to make sure that from a financial perspective, there's a lot of security in there that the parachute's going to happen. But there of course, there's a lot more to this life transition. Maybe the second parachute is socially, emotionally. What am I going to do all day? Where am I going to find purpose? So let's chat about today, the non-financial side of it.
Adam Werner 02:09
Yeah and I'll just share some context there. I don't know about you. We haven't had this discussion but when you and I went down this path of becoming financial planners, this side of that conversation was not, no one coached you up on that side, right? Just the human interaction, like actually trying to have those conversations of not just can I retire financially? Yes, I can check these boxes. I'm going to be okay but now the second part of people's retirement is what will I do with my time? And we've now seen it enough times that not everyone has an answer to that initially. So just having those conversations, being able to now have some perspective, then we've been around long enough now that we have some experience going through this many times that we're seeing more and more need for that side of the conversation. As you said, it's something that I don't think a lot of people necessarily talk about but we certainly see the importance of solving both sides to that retirement equation.
Benjamin Haas 03:20
Then let's talk about some of those things that we see and it's not that we are clinical psychologists here, we're not trying to represent ourselves that way. But we do have a wealth of experience and stories to tell and what we've found work for clients and how we can play a role in helping that work. I'll start with one and then I'll throw it back to you for maybe the next one.
Adam Werner 03:39
Sure.
Benjamin Haas 03:41
I think it's really important to be gentle with yourself and not feel like I have to have the next 30 years of my life figured out. Right? We often in planning on the financial side go, well, let's really think in these smaller increments of the next two years, the next four years. Life changes a lot; the world around us changes a lot. Retirement can essentially be a blank sheet of paper on where you're going to go with things and what really matters to you and even that may change. So I think our first piece of advice is, it's okay to not know what's next for you. Just feel good that you can financially do what you need to do and we'll figure the rest out later.
Adam Werner 04:25
It reminds me of that old joke or the old saying of, how do you eat a Buick? And it's spoonful by spoonful, right? You can't just do all of retirement in day one and we've certainly seen there are people that know what they are retiring to. I want to do XYZ in retirement but we also see equally as much, I'm not sure, I know I don't want to be in my stressful job anymore and that's one thing, but then, what am I going to do to fill my time? I'm not sure I have some interests and maybe it's exploring some of those. I think breaking it into smaller chunks makes it easier to digest and gives you the freedom you being, whoever's looking to retire or in retirement now gives you the freedom to just try things. It's just going through that trial and error process to really find what fits for you.
Benjamin Haas 05:25
Yeah, and it's again, another analogy that kind of pops into my mind. It is that next stop mentality, it's not the last stop and I almost think to, I go, it's everything in my life is the kids, right? It's the three year old right now that like free play means this gets dumped over here, five minutes later, I'm not really interested in that. So now we're going to move to puzzles, now we're going to move to Legos. It's okay to have that kind of free play mentality of, find the things that I feel like I may have been missing from work and I guess that would be my second piece of advice. What is it about the workplace environment that you feel like it brings you what you need on a daily basis? Is it socialization? Is it I have to feel like I'm productive? What is it about that and pull that little piece out of it and let's find a way to fill that. Maybe it's going to be other kinds of work. Maybe it's going to be volunteering. Maybe it's hobbies. I don't know what that is for people but it's okay to be okay, not having a specific answer and just trying things out, knowing that at that point, it's not about a paycheck. If something doesn't work out or you don't like it, it's okay. On to the next.
Adam Werner 06:35
I think it's certainly in the book and we see it too. There needs to be some sort of motivation to get out of bed in the mornings, right? Whether that's your family, your grandkids, it's the volunteer job that you have, it's having some sort of purpose or something that you like to do and gives you satisfaction in life in general. It’s a huge component that we see in retirement feeling like a success to people.
Benjamin Haas 07:06
I would take that one step further. I know I've said it kind of another goal oriented planning. But there's the rule of 168. There is only 168 hours in a week and if we think about work, maybe filling 40 of them, you can start to peel away, well, gee, if I'm going to add maybe one healthy choice habit, if it's exercise or walking, or something early in the morning, I'm going to have another hour a day where maybe I'm helping someone out, it's charity, it's my grandkids and maybe after connecting with people over lunch and coffee, phone calls, you start to plug away at that. We often hear from our retired clients, I feel busier than I would have ever imagined. So I think sums What am I going to do all day, maybe that mental hurdle more than once you start to get into that rhythm of starting to add the things that you may have feel like you didn't have time for, it's not as big of a gap as you may have thought.
Adam Werner 08:01
And certainly mentally, I'm thinking back to a conversation I had a few weeks ago with a client that said that exact same thing. I am busier now that I am retired and I'm in my second year of retirement or maybe it was even the third year. I'm busier now than I ever had been when I was working. I feel overwhelmed but it's all things that he wanted to do. They were all positive in nature so even feeling overwhelmed and busy to that point, still didn't stress him out because it was things that he wanted to do. There were things on his checklist that he wanted to accomplish. So even feeling busy was an okay thing because there wasn't something he didn't look forward to on that list.
Benjamin Haas 08:43
That's why I think it is some of just mental hurdles or fear of the unknown and I think one of the great points in the book and we see this with our clients too, sometimes it's just trying to give them perspective. You've probably gone through some sort of major life transition before and it may not have been leaving work and hopefully we give some of the confidence to know that the paychecks will be recreated but you've probably had, then I don't know who you're talking about. You've raised kids before. You've maybe gone through a job change before, maybe it was relationships that changed, maybe it was loss of a spouse or a loved one, right? You've had to re-adapt and you're probably stronger at that than you think that you are. You just have to kind of put this life transition in that same camp you successfully got through it before. It doesn't mean that that wasn't without bumps or bruises or a little bit of stress here, anxiety there but again, you'll get through it and you'll fill it as you said with things that do matter to you.
Adam Werner 09:43
Patrice makes the point in the book too with one of the stories from one of the examples that she uses, that those life transitions most people have gone through them whether it's you know, buying or selling a house, moving, job transition. Most people have gone through those at some point in their life but they may be pretty far removed from when they last experienced that. It may be 20-25 years from the last time you would have gone through something big like that and it's just reorienting yourself with, I did this before, it may have been a while. So maybe I just need to practice or at least get okay with the idea. It's not something that we think that it's going to be too big of a hurdle for people to jump over but it may just feel new again because it's been so long since you last went through a big life transition and that's to your point, that's okay.
Benjamin Haas 09:44
Yeah, what I think what we would want to help with as well is to make people feel like they do have some sort of support system and that is what's neat about our community and kind of where we work and who we work with. Right, there are these opportunities to kind of feel like you are supported by other people. You know other people. I mean, most people have friends their age. You probably have other people around you that have gone through this transition. It's probably just a really, hopefully easy segue to insert yourself in some of what they're doing. If you don't know how to spend your time, ask them what kind of worked or what didn't work. It's conversations, have a cheerleader and if you don't have one, again, let us know. We have lots of clients that like to just feel like they can socialize with other people. So I think having that support system is another really important takeaway. It's okay to ask for help and it's probably one of the saddest parts of this last year of a pandemic and people that have either wanted to retire now feel like they have to retire. They're not having that socialization. It's a sad thing. Yeah, hopefully on the other side of this, you know, make it a point to include that in your life.
Adam Werner 11:54
I agree. Well said.
Benjamin Haas 11:57
I guess I have one more if you want me to go there. We know a lot of people that maybe aren't ready to retire financially but they know that they really don't want to stay in the job that they are in. Again, maybe things are now changing too quickly because of a pandemic, kind of the changes in the workforce working from home. Now it's new technology and new processes. I know that we talked about this a couple weeks ago in a podcast. It's okay to kind of have a transition plan. I think it's really important for people not to stay in an unhealthy situation for themselves and maybe it's just compounded if you feel like you don't have that financial parachute. You're also not really ready to fully retire. Start to explore what do we really need to have happen. We have a client that, you know, she's just great. We need to get her in a spot where she had the confidence to say, I don't need to go out and earn that money anymore. I can start this transition out of the workplace by acknowledging okay but what do I need to go make? And that's where we can be a good resource too.
Adam Werner 13:04
In pinpointing the financial side of what will make retirement work financially, that gave her the confidence to choose a career change that is going to be more fulfilling. It is in a line of work that matters to her and that is going to give her a level of satisfaction that her last job just did not. But I think to your point, it took a little bit of data behind the scenes. Going through that financial planning process to kind of pinpoint financially, what does that actually mean? What do I need to go earn to then to feel like it's okay to now go do this more fulfilling but lower paying job? And then that I'm still okay financially for the rest of my life?
Benjamin Haas 13:53
Yeah, so that's where I hope we can wrap those two things together. That's what we're here for and we hope that one parachute does kind of give you the space and time to figure out that next parachute, what am I going to do all day? How do I reinvent purpose because that is, again, the other side of this, that we really want to be okay. That as people start to think, Hey, I don't want to work on the line anymore. I can't teach in this environment. My company's being acquired and I don't think I can work in these new systems with these new doctors, whoever it is that we're talking about. It has to give them that freedom and hopefully a couple of these key points to go, "things will be okay. It's going to work out." You can figure out some of this later but this book I think is a great resource and anybody that's struggling with it or even just have some questions on what does it seem like it's going to be. Patrice does a really good job sharing stories about people that she's worked with.
Adam Werner 14:49
I was thinking the same thing at the end there. For anybody that feels like that's something that would interest them, let us know we have copies of the book here in the office. We'd be happy to share for anybody that wants to go through that process.
Benjamin Haas 15:03
First come first serve.
Adam Werner 15:05
That's right.
Benjamin Haas 15:08
Thanks Adam.
Adam Werner 15:09
All right, thank you.
Benjamin Haas 15:12
Bye.
15:21
Hey everyone, Adam and I really appreciate you tuning in. Please note that the opinions we voiced in the show are for general information only and are not intended to provide specific recommendations for any individual. To determine which strategies or investments may be most appropriate for you, Consult with your attorney, your accountant and financial advisor or tax advisor prior to making any decisions or investment. Thanks for listening!
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