Is your retirement date within your grasp? Retirees share the best bit of advice they ever received and what they know now that they wish they knew then.
Where retirement planning and retirement reality intersect, some of the toughest decisions and biggest uncertainties loom. Will I have enough money? Will I miss the intellectual challenge of the job and all the water-cooler gab? Will I get along with my significant other if we’re both retired, or if one of us still works and the other doesn’t? In fact, should we stagger our retirements? Is there a perfect equation of ideal age and portfolio size that greenlights retirement?
Syncing retirement scheduling with financial and personal goals, and health and longevity prospects, is a worthwhile exercise. You should have an investment plan, or risk a huge miscalculation in what you’ll need to maintain (or perhaps improve) the lifestyle to which you’re accustomed. But retirement planning is not one-size-fits-all. You need to be flexible. Retirement may not happen exactly when you think it will, or on your terms, as the retirees featured here will confirm.
TD Ameritrade client Gary Polasek had his retirement date partly determined for him when market conditions prompted his sale of a majority ownership in a successful oil and gas producing company. That move launched Gary into the next phase of his life in his early 50s. He punches a different clock these days after turning a hobby cattle-and-hay ranch he purchased a few years before retirement into supplemental income. He also keeps a standing Thursday tee time. Both endeavors keep him connected to his community and a network of friends, which he says has eased his transition from full-time office life to his work-hobby blend.
In addition to a diversified portfolio, Gary took advantage of company stock-ownership plans in his corporate days, a move he suggests anyone investing for retirement consider. “It’s the best stock research, a business model for which you’ve got a front-row seat,” he says.
Gary recalls advice he received just after the 1987 stock market crash from a then-retiree that he thinks applies to our still-fragile recovery from the 2008 crisis. “At that time, he reaffirmed my confidence in the stock market. I was thinking, time for cash? He convinced me we were simply looking at a long-term buying opportunity.”
TD Ameritrade client Dennis Goerner, in his mid-60s, did have more control over the timing of his departure and took advantage of company-sponsored seminars on preparing for retirement. But, few offer a seminar that shows you exactly how to spend all day, every day, with a wife you love but whose routines are very different from yours. Dennis and his better half intentionally retired a few years apart—him first, so that the self-described “dabbler” got used to this next phase of life at his own pace. She’s a joiner and has filled her days with volunteer work. But he doesn’t want a retirement full of commitments.
Dennis says the key to his retirement “comfort level” is a blend of professionally managed investments and a portion of his portfolio for self-directed trading. His “play portfolio” keeps him interested in the stock market, and allows him some ownership of his investing fate without potentially compromising income. “Other than a ride at Six Flags, I’m not sure there’s anything as exciting as the stock market,” he says.
But perhaps his biggest investment in himself is the adoption of a certain philosophy. “Retirement doesn’t really change you. You’re the same person, the hours are just a little different. My past was very important to me. It informs my present and makes it easy to transition to the future,” he notes.
So, when is the ideal time to make the future now? TD Ameritrade client John Hollaway looks at it in the simplest terms.
“Don’t wait,” says John, who retired 21 years ago from a major technology firm at age 56. He does wish he’d been educated earlier on Roth IRAs.
They differ from traditional individual-retirement accounts in that there are no upfront tax deductions for contributions to a Roth when you put money in. However, earnings are federal tax-free when they are withdrawn as long as the account has been open for at least five years and you are age 59½ or older. There are other differences, including income limits for Roth eligibility. And unlike a traditional IRA, a Roth does not require you to take to take Required Minimum Distributions at age 70½.
John’s relatively young retirement has challenged him to balance conservative, income-generating investments within a portfolio that’s aggressive enough (with growth instruments) to finance a long retirement.
Whether retiring “early” or working well into one’s 70s, there’s no cookie-cutter retirement plan. But these clients do share this sentiment: you have to feel your way around retirement. Planning and investing will provide a base. What you do from there is of your own making.
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