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What does retirement mean to you?

Last week, Serena Williams announced her retirement in a Vogue article. She had several interesting things to say about retirement.

I have never liked the word retirement. It doesn’t feel like a modern word to me...Maybe the best word to describe what I’m up to is evolution.

One of the financial planners in my office refers to retirement as Life 2.0. He would know, as financial planning is his "Life 2.0" after taking an early retirement package from his long-term employer.

Retirement is a chance to explore something new, or an area that you never felt like you could take on when you were working full-time.

Many times, it is more of a mental shift than an economic one.

We encourage our clients who are retiring to stay busy doing something. Work part-time at a job you love, pick up that hobby you always wanted to master, or volunteer several days a week for the organization that you have always been passionate about.

But don't decide you are going to transition 100% into a life of vacations, golf, and sitting at home.

"Retirement" in stages

With our clients, we plan for retirement in stages. At the beginning of retirement, we have years where the clients continue to "work" at least part-time. Depending on their financial resources, this could be paid or un-paid. But we also plan for clients to spend more in those early years.

Hopefully, they are healthy, and the extra time allows them to take extra vacations, buy a vacation home, or go on the month-long RV trip they have wanted for the past decade. And it's important to plan for those early because at some point, health starts to deteriorate.

You still need to plan

I'll end with a word of caution. Just because retirement is changing, that doesn't mean you can avoid planning for it. You still need to save, invest, and plan for what Life 2.0 may look like. The idea of retirement being an evolution still hinges on the fact (and is made possible by) you have the financial freedom to do so.

Without prudent planning, you will not develop the financial resources needed to successfully transfer into Life 2.0.


Matthew B. Boersen, CFA, CFP®

Aug 19, 2022