Category Archives: Retirement Planning

Ideas to help preserve and grow your money

Protect Yourself Against Cognitive Decline

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My Comments: Readers of my posts know I usually talk about money or some aspect of it. My challenge over the years has been to assess the financial literacy of whomever I’m talking with. And that challenge increases with age; both mine and that of my friends and clients.

This article might start a useful conversation between you and your children and/or other family members. I’ve had clients reach the end of their lives leaving loved ones totally ignorant about their financial lives. It can dramatically increase the pain and frustration of those they leave behind.

by Danielle Howard \ Aug 12, 2017

You could lose the ability to manage your finances and not know it

Many people work hard to make sure there are ample assets to provide for the go-go, slow-go and no-go season of life. Have you ever considered how the mental capacity to manage those resources will change as you age?

A study done in January of 2017 by the Center for Retirement Research at Boston College delves into how cognitive aging could affect financial capacity.

Your financial capacity is the ability to manage your financial affairs in your own best interest. It scopes a broad range of activities ranging from rudimentary money skills (understanding the value of bills and coins) to complex activities such as identifying assets and income, exercising judgment around risk and return of investments or comprehending tax implications of purchases or sales.

Many activities in our financial lives are based on “crystallized” intelligence. This is the knowledge and skills we have gained over time, also known as financial literacy. These are the practical, day to day financial applications or procedures in our lives. It is heightened with the level of involvement in family monetary matters. With normal cognitive aging, knowledge remains largely intact throughout our 70s or 80s.

Our “fluid” intelligence incorporates memory, attention and information processing. As our wealth grows, so does the need to track where it is, and how to best use it for what is important to us. This “fluid” aspect of our intellect can start to decline as early as age 30.

The research found that individuals who age normally are more likely to develop deficits in the area of judgment over their ability to carry out the basic tasks. However, there are cautions in both areas of capacity.

Many people in their fall season are competent of managing the “crystallized” aspects of their financial lives. If a person has not taken an active role in the family finances, they are vulnerable to losing capacity in this area. A “financial novice” may be a person that has had to take over the responsibilities of managing the family finances in the event of a death or incapacitation of another family member. Women who lose a spouse and have not been involved in the family finances are highly vulnerable to losing capacity in this area.

Cognitive impairment, ranging from mild (CMI), to dementia primarily affects financial judgment — the “fluid” intelligence”. This can pose challenges in that a person can feel confident and remain “knowledgeable” about day to day activities, but their impaired judgment makes them more likely to become victims of fraud. As people loose both the “crystallized” and “fluid” elements of their intellect, they are additionally exposed to financial abuse by caregivers.

Since a critical characteristic of cognitive decline or impairment is the unawareness of the deteriorating state, how can we protect ourselves and our loved ones?

1. Become financially literate. I have heard too many stories that started with “my spouse is the money person, I just let them take care of it”. Educate and empower yourself around everything financial. Start somewhere and keep learning.

2. Educate yourself on the aging process. Talk to your elder family members as to what they are experiencing. Embrace and make the most out of it. Do the best you can with your choices to maximize your health in all areas of your life during this season.

3. Build trusted relationships. That includes your relationships with friends, family and advisers (health, spiritual, financial). Make sure everyone has your best interest in mind and communicate with each other. Transparency, integrity and honesty will serve you well.

Danielle Howard is a Certified Financial Planner practitioner. She’s the author of “Your Financial Revolution: Time to Recognize, Revitalize, and Release Your Financial Power.”

Retiring Early? Here’s How to Delay Taking Social Security Anyway

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My Comments: I’ve you’ve not yet signed up to receive your monthly Social Security benefit, this is worth a read. I encourage everyone to try and wait until Full Retirement Age (FRA). The outcomes are likely to be much better.

If you claim Social Security early, your checks will be permanently reduced. Consider looking for income elsewhere so that you can wait until full retirement age.

Wendy Connick \ Aug 9, 2017

Sometimes retiring early is unavoidable. If you’re struggling with chronic health issues, or if you’re laid off from your job in your early 60s and see no prospect of getting another, it just makes sense to go ahead and retire. On the other hand, claiming Social Security early can put a serious crimp in your income later on: Starting Social Security payments before full retirement age means your benefits checks will be permanently reduced. But if you can scrape together enough income from other sources, you can wait to claim Social Security until the most financially practical time for you.

Here are five ways to fill the income gap between the day you retire and the day you start collecting retirement benefits.

Buy an annuity

If you retire early, it may make sense to take a chunk of money and use it to buy an immediate fixed annuity. These annuities pay you a set amount of money every month for the rest of your life. That makes them something of a substitute for Social Security, and if you have cash to buy a substantial annuity, you may be able to delay taking Social Security for years, thereby letting your eventual benefit amount grow.

A caveat: Annuities are complex products that come with fairly restrictive terms, so do plenty of research on your options before buying one. You can start by learning some of the basics HERE.

Construct a bond ladder

Bonds are an excellent source of guaranteed income in the form of interest payments — but the drawback is that in order to get a decent return on investment these days, you need to purchase fairly long-term bonds, which means your principal will be tied up for years and years. Bond ladders help you to get around this problem. To construct a bond ladder, you buy bonds with different maturity dates so that you will regularly have bonds reaching maturity and releasing principal back to you. As you get your principal back, you use it to buy new bonds and keep the ladder going. Another perk of bond ladders is that if interest rates go up, you’ll be able to take advantage of the new rates as you continually buy new issues to replace the bonds that have matured. While interest rates are quite low even on long-term bonds, a good bond ladder can provide a substantial amount of income.

Buy dividend stocks

With their exceptionally high long-term returns, stocks are an excellent money maker. However, in order to realize the income from a stock’s increased value, you have to sell it. An alternative way to get income from stocks is to buy ones that pay regular, high dividends to their stockholders. While dividends aren’t as reliable a source of income as bond interest payments, if you invest in dividend aristocrats — companies that have paid dividends for at least 25 consecutive years — then those payments are likely to keep coming, and increasing, for many years. This strategy works well for retirees, because dividend aristocrats also tend to be large, stable companies that are unlikely to suffer from high volatility.

Get income from your house

The above strategies require a retiree to have a substantial chunk of money at their disposal. If your accounts aren’t quite so well-funded, you might not be able to generate enough income from them to get by without Social Security. In that case, your house may be the resource you need to make up your income gap. If you have more house than you require, renting out a room might be an excellent source of income — especially if you live in a college town. A somewhat more permanent option would be to get a reverse mortgage on your house, but before you pursue this option, make sure that you understand all the consequences of doing so. Finally, if all you need is a little extra cash to smooth out your cash flow, a home equity line of credit can help.

Work part-time

The side hustle is an increasingly popular way to make money at any age, and the best side hustles are the ones you actually enjoy doing. Your favorite hobby might be just the thing to bring in some extra cash; it’s clearly something you enjoy doing, since you’re doing it now without being paid for it. You may be surprised by how many people would be willing to pay you for the fruits of your labor. So if you practice any sort of craft, from sewing to building bird houses, try setting up a shop on Etsy or a similar site and peddling your wares. If you love gardening, look for a local farmers market and figure out what it would take to set up a profitable booth. And if you have years of experience in a job that can be done without leaving a computer, then you may be able to find freelance work online. There are several websites that exist solely to connect freelance workers with companies that have a short-term need for help.

A side hustle likely won’t pay the bills on its own, but combined with the other options above, it could help you stay afloat until you reach full retirement age — and finally claim those Social Security benefits.

Retirement Expenses You May Not Expect

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My Comments: Aaahh, bliss! Nothing to do but relax and watch the years roll by.

You and I both know that’s not likely to happen. For one thing, it’s too easy to get bored and stressed out with not enough to do. Okay, some of us love retirement, but I’m not one of them.

Being properly prepared for it involves understanding the financial dynamics that come with the territory. Here’s a few thoughts to consider. Comment if you don’t agree or need some help.

Wendy Connick \ Jun 25, 2017

Planning for retirement can be quite a challenge. It’s an event that may not come for many years and that will last for decades (you hope), and yet you have to figure out how much this event will cost so you can save up for it now. And if you forget to account for one of the expenses below, you could end up shorting yourself on retirement income no matter how carefully you save and plan.

1. Inflation
Inflation can be a retirement-killer. It’s the reason why prices for everything go up over time. But consider what that means for your retirement: If you save enough to cover today’s expenses, but prices go up by 10%, 20%, or more by the time you retire, then then your income will fall seriously short of your needs.

Let’s say you’re aiming to save up $1 million by the time you retire 20 years from now. That’s a pretty worthy goal, and it may be enough to see you through retirement when combined with Social Security benefits. However, inflation in the U.S. has averaged 3% per year over the long term, so let’s assume prices will rise by 3% for the next 20 years. By the time you retire, that $1 million will be roughly equivalent to $540,000 in today’s dollars. In other words, the buying power of your nest egg will be cut nearly in half.

If retirement is still a long way off, you can use that 3%-per-year figure to estimate how much your expenses will change. If retirement is less than 10 years away, then you can safely assume a slightly lower rate of inflation, given that inflation hasn’t crested 3% in 10 years.

2. Taxes
Income taxes don’t go away when you stop working. But once you no longer have an employer, there’s no one helpfully taking the tax money out of your paycheck and passing on to the government for you. Whatever income you expect to receive from Social Security, retirement savings accounts, and other sources, you need to budget for the taxes you’ll be paying on it. Distributions from tax-deferred retirement accounts such as IRAs and 401(k)s are taxed as income, so a large distribution can trigger an enormous tax bill. For example, in 2017, if you draw $50,000 from a traditional IRA, you’ll have to pay $8,239 on that income — plus taxes on your Social Security benefits.

Don’t forget that many states charge income taxes as well. If you own a house, property taxes can be a significant expense that you’ll need to budget for. And although selling assets within a retirement account such as a 401(k) or IRA won’t generate capital-gains taxes, selling them outside of a tax-advantaged account will.

3. Long-term care
As we age, certain day-to-day activities become more of a challenge. When your health deteriorates to the point that basic activities such as bathing, dressing, and feeding yourself are too difficult to manage, you need long-term care to help you with such activities. About 70% of the population will need some form of long-term care, yet few retirees budget for this service. And unfortunately, Medicare doesn’t cover most long-term care services, considering them to be nonmedical expenses. The easiest way to cope with such expenses is to buy long-term care insurance, though you can also self-insure by saving enough to cover such expenses yourself. However, be aware that long-term care isn’t cheap: One year in a private room at a nursing home costs on average nearly $100,000.

4. Medical
Many people are under the impression that Medicare will cover all medical-related expenses once they hit age 65. Unfortunately, the truth is a lot more complicated than that. Original Medicare (meaning Medicare Part A and Part B) will cover a lot of services, but definitely not all of them. For example, Medicare is no help with medical devices such as hearing aids or wheelchairs, and it won’t cover any dental, vision or prescription expenses.

A Medigap or Medicare Advantage plan can help, but even the best insurance policy won’t cover every possible expense — and the more coverage a health insurance plan offers, the more expensive it’s likely to be. All in all, it’s important to budget for increasing medical expenses as you age. And if you have pets, don’t forget to budget for them, too. Just like humans, pets tend to run up higher and higher medical bills as they age.

5. The unexpected
You can research and plan and try to save up for every imaginable expense, but inevitably, something will come up that you never thought of, and it will probably be an expensive something. That’s why it’s just as important for retirees to have an emergency savings account as it is for workers. In fact, it may be even more critical for retirees, as most of them are on a fixed income that leaves them with little room for error. An emergency savings account with a few months’ worth of expenses in it can turn that unexpected expense from a financial catastrophe into a minor headache. And once it’s resolved, you can go back to your happy retirement.

How do I safely invest my retirement savings for growth?

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My Comments: Financial illiteracy is a huge problem. But many people have no idea it applies to them.

The other day I was trying to explain something to a widow in her 70’s and it was like talking to my six year old grandson.

People should be exposed to the markets. But they need to shift some of the risk associated with the stock and bond markets to an insurance company. Over the next 10 – 20 years they’ll have a better overall rate of return without the headaches. There is a way to remain invested and not be exposed to all the risk. But you have to be careful about the fees. Send me your email (see Contact Info above) and I’ll explain further.

by Walter Updegrave/May 30, 2017

I have a retired friend who knows he needs growth to ensure his nest egg will last throughout retirement, but at the same time is nervous about the investing in the stock market. Any advice for how he should invest?–D.F.

First, let me say that I don’t blame you (I mean your friend) for being skittish. Even though stock prices have more than tripled after bottoming out in the wake of the financial crisis a little more than eight years ago and now stand at or near record highs, there’s that nagging concern in the back of many investors’ minds that the market could suddenly reverse course and we could be looking at another major selloff and a prolonged slump.

And, of course, at some point that will happen, as it has many times before. We just don’t know when or what will trigger the downturn. So the question is how do we invest our nest egg so we can take advantage of stocks’ potential for long-term growth without leaving ourselves too vulnerable to devastating setbacks that could jeopardize our retirement security?

The answer comes down to balance. But not just balance in an investing sense, or creating an investing strategy that reflects an acceptable tradeoff between risk and reward. I’m talking about balance in an emotional sense too, achieving a level of equanimity that helps us keep our composure when the markets are in turmoil, so we don’t do something we’ll later regret, like selling stocks in a panic at depressed prices.

The first step toward achieving investing balance is to build a portfolio of stocks and bonds that can generate acceptable returns while also providing reasonable downside protection. For help in creating such a stocks-bonds mix, you can go to Vanguard’s free risk tolerance-asset allocation tool.

The tool will also give you a sense of how such a blend of stocks and bonds has performed in the past, and you can also see how many years the various portfolios have suffered a loss and how each has performed on average over many decades.

You shouldn’t think of this as any sort of guarantee of how a given combination of stocks and bonds will fare in the future. If anything, many pros believe average returns going ahead for both stocks and bonds will be considerably lower than in the past. But at least you’ll have a good idea of how different mixes have behaved under a variety of market conditions.

In your zeal to protect yourself against setbacks, however, you don’t want to end up with a mix that’s so wimpy that you run a high risk of running through your nest egg too soon. So to get a sense of whether your recommended mix of stocks and bonds will be able to support the type of spending you envision during a retirement that could very well last 30 or more years, I suggest you also go to this retirement income calculator.

(The tool assumes you’ll live to age 95, which I think is a reasonable assumption for planning purposes. But if you’d like to see how long you might be around based on your age and health status, you can check out the Actuaries Longevity Illustrator.)

The calculator will estimate the chances that you’ll be able to maintain your planned level of withdrawals from your nest egg. If that probability is lower than you’d like — as a general rule, I’d say you’d like to see an estimated success rate of 80% or more, give or take — then you can re-run the numbers with different asset mixes and different withdrawal rates.

In general, though, as long as you keep your initial withdrawal rate within a range of 3% to 4% or so, you should be able to have decent assurance that your nest egg will support you at least 30 years. You can go with a higher withdrawal rate, but you’ll find that the chances of your money lasting throughout a long retirement start to drop off pretty quickly as you push your withdrawal rate above that range.

Once you’ve settled on an asset mix and withdrawal rate, you can turn your attention to emotional balance. I don’t know of a tool that can help with this aspect of investing and planning. Rather, the idea is to find ways to stay cool when the markets are (or seem to be) crumbling around you, and to avoid giving in to the impulse to take action when every fiber of your being is screaming at you to do something, anything!

One way you might maintain your composure when most investors are all shook up is to remind yourself that not all market downturns turn into full-fledged routs. You could even take a few minutes to review instances in recent years (Brexit, the Greek debt crisis, fears of a slowdown in China’s growth rate) when many investors were convinced a market drop would lead to a major selloff but stocks recovered. If nothing else, this exercise could reinforce the notion that it’s foolish to try to outguess the markets.
And even if things get truly ugly, you might take a few minutes to recall the process you went through to arrive at your portfolio and remind yourself that you factored the likelihood of a significant setback into your decision-making when you settled on your asset mix. Indeed, the whole point of the exercise was to create a portfolio that you could stick with regardless of what’s going on in the markets and that, aside from occasional rebalancing, you wouldn’t have to re-jigger.

And while I wouldn’t go so far as to suggest you don’t keep track of economic and financial news, you certainly don’t want to follow it obsessively, especially if watching every tick of the market’s downward trajectory gets you so rattled that you’ll eventually cave in to the urge to abandon your long-term strategy.

That’s not to say you can never make a move. There may be times when you should. If, for example, it becomes apparent that you overestimated your appetite for risk when setting your stocks-bonds mix, then you need to re-assess and do some fine-tuning. But if you do make a move, you should do it calmly, rationally and as part of a well-thought-out plan, not in response to the latest dip in the market or on the basis of some pundit’s prediction of coming Armageddon.

I Inherited a Roth IRA. Now what?

My Comments: More and more people have Roth IRA accounts. A common question about retirement is whether to draw money from their Roth IRA first or take money from their non-Roth retirement accounts first.

It depends. Any money not yet taxed is going to get taxed. Period. The Roth IRA money comes out tax free; the taxes have already been paid. If your non-spouse beneficiary is in a high tax bracket, it may be better for them to get it in the form of Roth money.

Most beneficiaries are simply happy to get unexpected money. If they have to pay tax, it’s not an issue. You can run a million scenarios and when all is said and done, it makes little difference in the grand scheme of things.

June 28, 2013 by Dan Moisand at MarketWatch.com

When you inherit retirement plans, the rules for how those funds are taxed and the options available to the beneficiary vary based on the type of account and whether the beneficiary is a spouse or not.

Today I explain to a non-spouse beneficiary some of the rules that apply to inheriting a Roth IRA. I also answer a reader question about one way to increase her Social Security payments even though she started taking benefits early at a reduced rate.

Q. My Dad is 74, and he has a ROTH IRA as well as a 401(k). When he passes away, my mom will inherit the retirement accounts, and then we his sons will. My question is can I, as a non spouse beneficiary, rollover the ROTH IRA into my personal ROTH IRA? — C.B.

A. No you cannot roll the Roth IRA money into your personal Roth IRA. Only spouses may do that. If your mother rolls the Roth IRA into her own Roth IRA, it is treated as though she had always been the owner of those funds, so those funds will continue to be exempt from Required Minimum Distributions (RMD), an attractive feature of Roth IRA’s. Also, she would name the beneficiaries. It is important to check that the beneficiary designations on all accounts match the wishes of the current account owners.

The beneficiary designation trumps anything written in one’s will or trust agreements. I saw a case in which the wife had a small IRA that named her church as primary beneficiary. When her husband died, she rolled his account into her IRA but did not change her beneficiary designation. When she passed away, the church was entitled to all of the funds. This was an unpleasant surprise to the beneficiaries.

You have two basic options as a non-spouse inheritor; take a lump sum or, transfer the funds into an account titled as an “inherited Roth IRA.” Taking the lump sum is pretty simple. The lump sum you receive is not subject to tax. Once you get your check, if you wish to invest any part of it, it will be taxed just like funds in any other non-retirement account.

Most inheritors with an eye on the long term prefer to rollover the money to an inherited Roth IRA. The assets continue to grow untaxed, you can choose your own beneficiaries and withdrawals are tax free.

You cannot, however, let all the account just sit in the inherited Roth IRA. By Dec. 31 of the year after the year in which the owner died, you must have begun taking required minimum distributions (RMD) annually. If you don’t make the RMD by that deadline, you will need to have withdrawn all the assets by the end of the fifth year after the year of death.

The RMD you will be subject to is based upon the IRS’s single life expectancy table. The value of the account on Dec. 31 of the year death is divided by the beneficiary’s life expectancy listed on that table to obtain the first RMD amount. For example, if you are 55 at the time, the table says your life expectancy is 29.6, you would divide the Dec. 31 value by 29.6. In the following year, you use the following Dec. 31 value and divide by one less year (28.6). The next year, use the value as of the next Dec. 31 and 27.6.

You mentioned you had brothers. There is one more step to consider. If your mom lists more than one person as beneficiary, you should have the shares of the account separated into individual inherited Roth IRAs by Dec. 31 of the year following the year of death. This enables each beneficiary to use their own life expectancy. Otherwise, distributions are calculated based upon the oldest beneficiary’s age causing distributions to occur faster than necessary.

This can be particularly important with non-Roth retirement money like a 401(k) in which distributions are taxable. Generally, beneficiaries wish to have the smallest RMD’s possible in order to control taxation better. A beneficiary can always take more than the RMD but the lower the minimum, the more flexibility in tax planning.

Again, make sure all the beneficiary designations on all accounts reflect the owner’s wishes. It should be noted that the rules are different if any of the beneficiaries are beneficiaries through a trust that is named as beneficiary of a retirement account. Naming a trust can be helpful but if not done correctly, can result in an acceleration of taxation.

Also, to accommodate an account holder’s specific wishes, many attorneys prepare customized beneficiary designations. Not all 401(k) plans will accept customized beneficiary designations so many will roll those funds into a traditional IRA.

Rates Won’t Skyrocket, So Ignore the Cassandra Chorus

My Comments: The last time interest rates started moving upward in a long term up trend was 1946. This lasted until 1981. Then they started moving down again.

Now, 36 years later, they have once again started upward. The central bank, known as the FED, started moving them back up about a year ago. Granted, the increases are tiny, but I believe it’s the start of an long, upward trend.

If you expect to live another 20 – 30 years, the financial landscape you’re used to is going to be very different. Rising interest rates are going to influence the value of your retirement accounts and other funds, the money you will use to sustain your standard of living going forward.

Just thinking about it could give you a headache…

By Scott Minerd, Chairman of Investments and Global CIO, Guggenheim Partners – July 17, 2017

When markets suddenly change short-term trends or direction, prognostication abounds to explain the most recent gyrations. Often, those who missed the move leading up to the sudden change by sticking to an earlier erroneous call will suddenly issue statements to vindicate the veracity of their earlier predictions. Others, looking to justify the conventional wisdom, will seize an opportunity as proof that the masses were right and the conventional wisdom, whether empirically true or not, still holds.

Such has been the events of recent days.

With the sudden rise of rates around the world, the pundits present the recent selloff as proof that long rates are bound to skyrocket as a result of any number of factors including reduction of the Federal Reserve’s (Fed) balance sheet, tapering of quantitative easing by foreign central banks, lurking inflation and growth, fiscal stimulus from Washington, D.C., and so on.

In moments like these, I think it is wise to step back and grasp the big picture. The Fed is on course to continue raising rates. If it does not, it is only due to weakening growth or inflation. Either way, case history tells us that the yield curve will continue to flatten.

As for ‎skyrocketing long rates, that seems unlikely during the current economic cycle. Virtually every business cycle ends with an inverted yield curve. If the yield on the 10-year Treasury note were to ‎rise to 3 percent, that would imply an overnight rate at 3 percent or higher. Using a number of metrics, an overnight rate of 3 percent would be so restrictive as to induce a recession.

Even the Fed, which has notoriously forecast rates higher than the market delivers, sees the longer term “terminal” rate (the apex of the policy interest rate during the business cycle) at 3 percent. Given the structural debt load on corporate balance sheets, a 3 percent short-term rate would ultimately prove unsustainable. With a cap on short-term rates around 3 percent, the likelihood that long-term rates could be sustained above 3 percent for any period of time is low.

Then again, there is a fairly good argument that the terminal short-term rate may be lower than 3 percent. Deflationary headwinds continue to restrain price increases. With declining energy and commodity prices, supply gluts in automobiles, competitive restraints on retail merchandise such as groceries and apparel, and a growing inventory of new apartments weighing on owner-equivalent rents, these headwinds are unlikely to dissipate anytime soon. Since inflation is tamed when real rates rise enough to choke off economic expansion, the lower the level of inflation, the lower is the nominal rate necessary to restrain it.

If that is the case, then the terminal rate is likely to be closer to 2 percent.

Only time will tell but that scenario argues for less policy tightening by the Fed as further rate increases are likely to slow the economy and inflation more than expected.

There is also the issue of valuation. Many routinely argue that bonds and stocks are overvalued yet the empirical evidence is sketchy.

As for interest rates, the last era of financial repression between the 1930s and 1950s resulted in long-term rates remaining below 3 percent for more than 20 years. The argument that 10-year yields need to be close to nominal gross domestic product (GDP) growth rates is equally unsound as, aside from the era of opportunistic disinflation from 1980 into early in the new millennium, 10-year yields on balance were below nominal growth rates for most of the past century.

Finally, the downtrend in long-term rates that began in the early 1980s is firmly intact. ‎To break that 35-year trend, the 10-year note would need to yield more than 3 percent for some period of time. Even if we did break that downtrend, history shows that rates will tend to move in a sideways consolidation for a number of years, often retesting the lows more than once.

The simple truth is that, while rates may trend higher in the near term, the risk is that we have not reached the point where the macro economy can sustain persistently higher rates. If anything, political, military, and market uncertainties would more likely lead to another sudden decline in rates rather than a massive spike upward.

Investors would be wise to ignore the growing chorus of Cassandra cries and look through the noise to the fundamentals. There are many things to be concerned about in the world but skyrocketing rates is not likely among them.

Retirement For Workaholics

My Comments: I’m NOT a workaholic. But I’ve learned that ‘retirement’ means very different things to people. For many of us, it’s an ugly word. For me it just means doing what I’ve done for decades, but with a recognition that today it takes me two hours to do what I used to do in one hour. With more frequent naps.

Douglas Dubitsky/Jul 5, 2017

This article is reprinted by permission from NextAvenue.org.

Can a workaholic ever retire?

Many workaholics genuinely enjoy the rush of starting and completing projects and continuing the nonstop cycle. So it may also be difficult for them to contemplate what life may be like in retirement once they are officially out of the workforce.

If you’re a workaholic, smoothing your transition to retirement means uncovering the answer to the question: What part of the end of your job will you miss the most? It might be the people. Or the challenges. Or having purpose. Once you know which it is, you can focus on how to reap the same benefits — and feelings — while not holding down full-time employment.

5 retirement tips for workaholics

1. Start slowly. If you jump into retirement all at once, the shock to your routine might be too much to handle. Instead, look for opportunities where you can work part-time, even with your current employer.

Cut back on your work hours gradually and your nonworking life could just slip into place. Look for a weekend job, or an after-hours job, to start while you’re employed full time. This could turn into part-time employment that you may want to pursue during retirement.

You might want to find out if your current employer would consider keeping you on as a consultant in retirement. This may help your employer retain your institutional knowledge while you enjoy a more flexible schedule.

If you plan to take Social Security retirement benefits before Full Retirement Age (between 66 and 67, depending on when you were born) and work at the same time, however, your benefit will be reduced if you make more than the yearly earnings limit. In 2017, the Social Security earnings limit is $16,920. Social Security deducts $1 from your benefit payments for every $2 you earn above the earnings limit.

When it comes to retirement, 60s are the new 50s. Instead of retiring, more and more people are working through their 60s to maximize their earnings. Here’s what you need to do in your 60s to make sure you live comfortably in retirement.

2. Experiment and schedule. As you wean yourself away from work, look for new ways to occupy your mind. This could be as simple as taking a cooking class, volunteering or exercising every morning before breakfast.

Also, at least in the beginning, either schedule your days down to the hour so you always have something to do or time-block the beginning or ending half of the day.

Has your spouse or any of your friends retired recently? Retirement may prove to be a great opportunity for you to spend more time with him or her. The same goes if you have children or grandchildren. You can reroute the attention you gave to your job to your family and friends.

3. Give yourself a break. A recent study by my company, The Guardian Life Insurance Company of America, found that one in six Americans is very dissatisfied with his or her life. Often, workaholics feel guilty about not having spent enough time with their families during their careers. Some didn’t pay attention to themselves either, or to the physical and mental benefits that come with rest.

So as you ease into retirement, don’t forget to take care of your own needs even as you strive to care more for those around you.

4. Talk it out. If you find that postwork life is more difficult than you anticipated — or even worse, that you’re feeling depressed or overwhelmed — don’t hesitate to get help. It’s important that you talk about your feelings with friends, family or other retirees going through similar transitions.

5. Look ahead. Most retirees find it doesn’t take long to adjust to life without a full-time job. Keep this in mind as you look toward your personal retirement plan. Focus on your retirement the way you’ve focused on your work and the years ahead can be your best ever.