6 Important Takeaways from the First Year of Retirement
I helped my father, a truck driver in Texas, retire last year. I’ve watched this “regular guy” closely since then.
Here are six takeaways we’ve learned about his first year of retirement:
No. 1: Rest period
My dad is good at this, almost too good. After years of stress on his body, he’s taking at least the first full year to relax.
I don’t know what hobbies he’ll pick up, but that’s a problem for later.
No. 2: Spending has gone up
He has free time now and needs to entertain himself. Many of these fun costs wouldn’t happen if he were at work.
People falsely imagine they’ll spend less in retirement. I have never seen that to be consistently true.
No. 3: The financial plan changed in six months
We created a plan which empowered him to quit last year. In six months, life changed, and that plan is already stale due to a new relationship, inheritance from family, and a new lifestyle for which he was unprepared.
Life happens, and we have shifted with it.
No. 4: Retirement income is a mystery
There’s been a big learning curve in how he will manage his money. His language is focused on “income” (based on his upbringing around pensions and annuities), so we’ve taken baby steps getting used to how it will work, even without annuities.
No. 5: Extra cash makes him feel better
It’s weird not receiving a paycheck after 50 years of work. He’ll be spending down his savings, which also feels weird. To cope, we’ve decided to let him sit on extra cash (compared to normal standards).
No. 6: Our relationship has changed
Anyone who’s worked with family and close friends can relate. Every conversation now has “work” mixed in. It’s taken time to adjust, but I wouldn’t trust anyone else with this job. I’m glad it’s me.
To sum up
My dad is one of the most “regular” guys I know, complete with all the stereotypes. Even so, his behavior is pretty close to every client I’ve worked with, no matter the size of wealth.
People are people. Once you understand them, you’ll be able to help.
Bryan Hasling, CFP® is a Financial Planner at Modern Financial Planning in Oakland, CA.
Bryan helps folks plan for retirement and reach financial independence on their terms. He is a CFP® professional.
In addition to custom portfolio design, he helps clients navigate their finances around complex topics related to their company-stock (RSUs, ESPP) and options (ISOs, NQSOs).
Prior to joining Modern, he was a Partner at a top Wealth Management firm in the SF Bay Area. He worked with affluent families and executives & founders in the tech sector.
