One year later and the retirement honeymoon continues. My husband, Mike, left his federal government job in July 2014 and the feeling, in his words, that “every day is Saturday” is just as delicious today as when he retired just over a year ago.
In a way, we have reversed our traditional roles. Mike is now the stay-at-home spouse while I travel all around the country delivering seminars about Social Security claiming strategies to financial industry groups and client events. He dutifully drives me to and from the airport and keeps the household running in my absence.
This is my fourth dispatch from the retirement front, which I hope can offer some insights for advisers working with retired and soon-to-be-retired clients.
"As the retirement landscape evolves, individuals have taken on greater responsibility to plan and save so they can reach their future retirement readiness goals," James Nichols, head of retirement income and advice strategy for Voya Financial, told me in a telephone interview.
The company released its Retire Ready Index earlier this year. Unlike the 36% of retirees in the survey who said their biggest adjustment to post-career life was missing the social interaction of work or the nearly 25% who found it difficult to occupy their time, Mike has experienced none of those withdrawal symptoms.
During the past year, he has made a trip to the gym part of his daily routine — and it shows. Not only has he dropped a few pounds, but his dangerously high blood pressure plummeted as well.
He has used some of his newfound time to devote to volunteer efforts, collecting supplies for a local homeless shelter and getting involved in donation efforts for military families and wounded warriors.
Before Mike was a federal employee, he ran his own public relations firm. I have been benefited from his prodigious talents during his quasiretirement as he promotes my Social Security expertise to various media outlets and groups for potential speaking engagements. So has one of our sons, Ross, a popular club disc jockey, who was featured in his alumni newspaper thanks to his father's gift of spin.
The highest-scoring retirees in the Voya Retire Ready Index calculated how much they would need to replace their paycheck before they retired, paid attention to how their money was invested and began planning for health care costs and long-term care issues well before retirement. We did all that.
Mike's two decades as a federal employee yielded both a pension for him and retiree health benefits for the two of us. We both saved for retirement from the start of our careers through our employers' 401(k) plans and focused on eliminating debt.
We worked with a financial adviser to draft a retirement income plan. And we'll coordinate our Social Security claiming strategies when the time comes to take full advantage of this government retirement program, which 61% of retirees in the Voya index identified as a major source of their income.
Mike's pension covers his personal costs, which now involve buying paint and potting soil rather than new suits and ties. But I am thankful that I continue to earn a comfortable income that pays our regular bills, such as mortgage and utilities, as well as the occasional splurges to update our 30-year-old home.
Yep, everything you heard about the first few years of retirement being as expensive — or in some cases more expensive — than your working years is true in our case. There is something about spending more time at home that leads to home renovation projects, such as remodeling a master bathroom and replacing tired furnishings.
Not only were we looking to recreate a luxury hotel experience by updating our bathroom, we were mindful of aging in place by adding a grab bar and bench in the all-glass shower. We joke that his is our “box” house — as in, we won't move until they carry us out in a box. When working with clients on the verge of retirement, ask them to create their wish list of home improvements (or bucket-list travel destinations) and earmark funds accordingly.
And then there's the unexpected household emergencies that can take a bite at of one's budget if living on a fixed income.
I arrived home from an out-of-town trip to discover a backhoe in our front yard. In my absence, a water pipe between our house and the county water line burst. Thank goodness Mike was home to discover the leak. Otherwise the damage could have been a lot worse.
We learned the hard way that such damage is the homeowner's responsibility. Chalk that up to a $4,000 lesson. For advisers, it should underscore the importance of counseling retired clients to maintain a hefty cash reserve. (I also regret disregarding a letter that I received months earlier offering low-cost insurance against such water and sewer pipe leaks!)
Bottom line from both the Voya Retire Ready Index and our personal experience: Planning is key. And financial advisers are the crucial link between developing a plan and keeping clients on course to realize their retirement goals.
(Questions about Social Security? Find the answers in my ebook.)
Mary Beth Franklin is a certified financial planner.