For most of our lives many of us have heard the old adage “Money can’t buy happiness.” And we can all think of numerous examples of individuals where this certainly seems to be true – whether among the powerful and famous, or within our own family or group of friends. But is that really true? Research over the last few decades suggests “NO!” In fact, many studies show that in one sense money can buy happiness. But it’s not the amount of money we have, but rather how we SPEND our money that can indeed increase our happiness – although perhaps not in the way Madison Avenue or Amazon Prime would like us to think. First, let’s address the skeptics among you who feel sure that if you simply had MORE money you would indeed be happier. Statistics show that certainly isn’t true, since 70% of all lottery winners or those with a sudden financial windfall end up bankrupt within a few years.1 Carl Jung, famous psychologist, said in fact that the keys to happiness were five things.
Atlanta Financial Newsroom
Successful Retirement: It’s All About Your Other “IRA”
Most of us spend considerable time planning the financial side of retirement but we often give the most important part of the next phase of life short shrift. Finding meaningful purpose, however you define it, is what makes retirement satisfying and fulfilling. At Atlanta Financial, we have found that it’s your other IRA – your “Individual Retirement Attitude” – that makes the difference in this next stage of life.
Often, the road to retirement includes deep exploration of our financial and investment strategies. However, most about-to-be-retired individuals spend more time planning their vacations than they do thinking through how they will spend “retirement time.” When it comes to travel options, we scour the Internet and read guide books to determine the most interesting place to go right now, along with the perfect hotel, tantalizing places to eat and even the best matched local guide. Sometimes this planning takes weeks or even months. But when it comes to charting out a retirement direction, it’s all about the money and little time is spent considering how you will spend your time during this new phase of life.
Many of us resemble the directionally-challenged protagonist in “Alice in Wonderland” who petitioned the owl for advice:
Alice came to a place where there were many roads. She stopped and asked the owl for directions. The owl asked, “Do you know where you want to go?” Alice said, “No.” “Well then,” the owl said, “it doesn’t make any difference which road you take now.”
This next statement may sound strange coming from a financial investment firm but at Atlanta Financial we see money as a tool – not a destination. All of the financial projections in the world cannot tell you which road to take. They merely can give you a spending speed limit. The most important question of all is this: “What will I do in retirement?”
That question can be difficult to answer and that’s where your Individual Retirement Attitude can help guide you.
Driving down an unmapped road
As financial advisors, our job is to help our clients set a personal path through retirement that will be both satisfying and fulfilling. As is true with most cases, the clearer the vision, the more successful the end result – and the same is true for retirement. Fulfillment hinges on balancing the financial matters on one side of the scale with interests on the other side.
First, consider what you like to do and what you don’t like to do. Next, think about the many ways you can bridge from full-time employment to full-time retirement. The length of these bridges and the timing of their use will vary for each of us. The clarity of our transition plan will cause the journey to be smoother for some of us and rockier for others.
How stressful is retirement?
For many of us, working or raising a family or both demanded our full-time attention for many decades. In retirement, those pressures decline and many of us struggle to find our way without these stressors.
According to an American Demographics poll, retirement is the most stressful transition of life. Consider how these stress-inducing life events stacked up:
- Retirement: 41% said retirement was a difficult adjustment
- Parenting: 23% felt raising children and step-children was tough
- Marriage: 12% said they struggled to adjust after marrying
Apparently, getting married and having children is just a 5k compared to the marathon that is retirement.
Retirement: Moving on to something new
Traditionally, most of us saw retirement as giving something up – a career or child-rearing, for instance – as opposed to going to something new. As we live longer, we need to expand our idea of retirement to be bridging from one phase of life to the next – at our own pace.
One of the most important considerations to make in crafting a purposeful retirement focuses on continuing to do the things that give you joy. Consider the wisdom of Theodore Green, who was 98 when he retired from the Senate in 1966, “Most people say when you get old you have to give things up but I think we get old because we give things up.”
Investing in self-discovery
As your financial advisor, we want to work with you to answer two equally important life-changing questions:
- “How will we invest your money so you can retire comfortably?”
- “How will you invest yourself and your time, as well as your money, so that you can retire comfortably?”
The first question will be answered as we work together over the years, investing your money and planning for your retirement and other financial goals. We will talk about appropriate asset allocation as you move through the stages of your life and how much money needs to be save to reach your goals.
The second question requires some thought and soul searching. To begin to answer this question, think about how you would like to spend your time in retirement. To start, break up your time across four activity categories:
- Play (travel, physical activity)
- Connect with others (family, friends)
- Renew or learn new things (hobbies, new skills)
- Work (professional, charitable)
Chart out a few days, weeks and months to see how your activity mix contributes to your venture into retirement. For those who are with a partner, have your partner engage in the same exercise but complete your work independently.
Next, compare your visions for yourself, as individuals and as a couple. You will likely see overlapping interests and some distinctly individual interests as well. If necessary, revisit your time allocation, both individually and as a couple, to find a way to converge on a mutually satisfying, energized retirement for each of you.
For those of you who would like to explore strategies for creating a purposeful retirement, consider joining us for Atlanta Financial’s retirement seminar November 10. This all-day event will feature Joni Youngwirth, a nationally recognized expert in creating a successful retirement. To reserve your space, contact Angela Fernandez at 770-261-5337 or firstname.lastname@example.org.
As you create your retirement vision, remember that you are not alone. Your financial advisor can serve as a single point of contact to tap into Atlanta Financial’s retirement contacts and resources to help you navigate this transition. One of those resources includes this bibliography, which contains vetted resources that you may find helpful in refining your Individual Retirement Attitude.
Anthony, Mitch, The New Retirementality, John Wiley & Sons, Inc., Hoboken, New Jersey, 2014
Birken, Emily G. The 5 Years Before You Retire: Retirement Planning When You Need It the Most. Avon, Massachusetts: Adams Media, 2014.
Johnson, Richard P. What Color Is Your Retirement? St. Louis, Missouri: Retirement Options, 2006.
Nelson, John E., and Richard N. Bolles. What Color Is Your Parachute? For Retirement: Planning a Prosperous, Healthy, and Happy Future. 2nd ed. Berkeley, California: Ten Speed Press, 2010.
Shultz, Kenneth S. Happy Retirement. The Psychology of Reinvention. New York City, New York: DK, 2015.
Taylor, Roberta K., and Dorian Mintzer. The Couple’s Retirement Puzzle: 10 Must-Have Conversations for Creating an Amazing New Life Together. Naperville, Illinois: Sourcebooks, 2014.
Zelinski, Ernie J. How to Retire Happy, Wild, and Free: Retirement Wisdom That You Won’t Get from Your Financial Advisor. Edmonton, Alberta: Visions International Publishing, 2009.
“How did the new tax bill affect me?” was the question on everyone’s minds this tax season, and for good reason. Even though this was touted as the greatest simplification of the tax code in my lifetime, I didn’t notice any reduction in time spent preparing returns. Those of you who reviewed your returns in detail noticed that the schedules look drastically different although contain all the same information. The short answer for many is that it didn’t materially change your overall tax liability. The outliers fell into one of a few buckets…
What would you do if you received a major financial windfall? Would you buy a new house or vacation home, give some to your family members, donate to your favorite charity, or take the trip(s) that you have always dreamed about?While most people will not receive a major financial windfall during their lives, it is not uncommon. You might receive a financial windfall by:
When I first sit down with prospective new clients to learn about their finances, one of the most common issues we come across is how spread out investment accounts are. We may have a brokerage account here, an IRA there and, very often, an old 401(K) or two still sitting in a previous employer’s plan. There are plenty of reasons why a 401(K) may be left behind with a prior employer – it could have gotten lost in the shuffle of beginning a new job, it may have just seemed like too much of a hassle to move the plan, or perhaps you took the time to roll the plan into an IRA but your employer made subsequent contributions you didn’t know about. These accounts, affectionately referred to as “orphans,” are becoming more and more common given the increasing frequency of job-hopping, especially among Millennials. So, who do these orphan accounts belong to and more importantly, what can be done about them?