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How Your Money Mentality Changes in Retirement

Reaching retirement can feel like crossing the finish line at the end of a 30-, 40- or even 50-year-long marathon. What does retirement look like for you? Everyone reading this right now, probably just had a different answer to that question. Because everyone’s vision for retirement is different. Some people look forward to the endless vacation days and the rest and relaxation of retirement. And some look forward to volunteering for a cause they care about. Others want to continue to work, maybe part-time, maybe consulting, or maybe at their local coffee shop. A life without an alarm clock is something we may dream about, but the truth is that retirement really changes how we view our money, and the switch from receiving structured, employment-driven income to living off of Social Security and our investment accounts can be more challenging than we realize.

 

If you’re retired (or nearing retirement), you’ve worked long enough to see a vastly transformed economy. With some public-sector and rare private business exceptions, defined benefit plans like pensions have gone the way of the dinosaur. This means the responsibility of saving for retirement has shifted to you. And just as your money mentality has changed over the course of your career, so too should it change when you retire.

 

Changing Your Money Mentality in Retirement

You used to ask yourself if you were saving enough money for retirement. Now you may ask yourself if you saved enough or you may worry about running out of money. No longer having a steady paycheck is one of the major concerns individuals have when thinking about retirement. Your advisor will work with you to talk about these concerns and develop strategies and run analyses to help put your mind at ease through strategic planning.

 

You used to set retirement savings goals. Now you set budget goals that make sense for your lifestyle/income. Budgeting can be new for some people. We work with our clients to help set a realistic and obtainable budget based on new income streams like Social Security, Investment Income, Pensions, etc.

 

You used to optimize your portfolio to reflect your growth needs and risk capacity. Now that you’re retired, you will be looking for capital preservation rather than growth from your investment accounts, and changing your level of risk to fit your new lifestyle are key changes to your investment strategy in retirement. We’ll work together to determine the right level of risk for you as an individual or family based on your lifestyle and goals.

 

You (probably) used to work full-time for your primary source of income. Now, luckily, you have a lot more flexibility. Do you want to work part-time? Volunteer? Or do you want to pursue a retirement career that reflects one of your passions? We would work together on a plan that will allow you to have the flexibility to decide what you want to do in retirement with the security of knowing you’re financially prepared to take on that next endeavor.

 

Retirement Mindset Means More Than Just Money

When you think about it, suddenly moving from working 40 hours a week to zero is a big adjustment for anyone. Although it may sound great in theory, the truth is that we’re creatures of habit—and we don’t always react well to quick and dramatic changes, especially if we are not prepared. This is where it makes sense to begin working together, with your advisor, prior to retirement. Working together to review every aspect of your financial life will put your mind at ease so that you can retire and continue to live the same lifestyle.

 

Everybody Needs a Helping Hand Sometimes

If you’re struggling with your money mentality, talk to your advisor. We are always here for you. We want you to enter this new phase of life with financial peace of mind and the security to know that you’re going to be just fine. We’ll work together to tell you “It’s Okay” that you take that big trip with your children and grandchildren. Or “It’s Okay” to stop working altogether. “It’s Okay” to spend that money on that big purchase you’ve been eying for the last 20 years. Know that you are not alone, and it is very common to have these questions starting to circulate in your mind.

So what does retirement look like for you? Let’s work together to create a financial plan that will incorporate your passions and goals, which will allow you to stay along the path to a successful and prosperous retirement.

WE’RE HERE TO HELP

Are you starting to think retirement is just around the corner? Call us and let’s talk about your vision for retirement – (410) 823-5442 or [email protected]

Chesapeake Financial Advisors is a fee-only financial planning, investment advisory, and tax planning firm with offices in Towson, Columbia, Frederick, and Chevy Chase Maryland.

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Tim CPA

Tim Mudd

Tim has over 20 years of experience in investment portfolio management. Before he started Chesapeake Financial Advisors, Tim spent several years in the financial services industry, including positions as research analyst, equity trader and statistician with T. Rowe Price and Croft-Leominster, both investment advisory firms located in Baltimore, Maryland.

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