The Key to Planning for Retirement

11.11.11: Over the years as a Financial Advisor and a Wealth Consultant, I’ve help many people transition into the glorious world of “RETIREMENT”. I’ve also seen that “retirement” means different things to different people. Retirement could mean finally having the financial ability to leave the job someone has had all of their adult life in order to pursue the career they’ve always dreamed of having. It could mean exiting the daily grind to work with a favorite charity.

The retirement you’re looking for may consist of golf, tennis and sunsets. The key to planning for retirement is to be honest with yourself, to be realistic in your plans and to avoid the “Newly Retired Trap”.

The “Newly Retired Trap” relates to how your lifestyle changes in the months that follow the end of a long career. Your routine is suddenly out of step and it doesn’t take long before the honey-dos start drying up or the favorite hobby/activity isn’t as much fun after doing it every day for the last couple of months. Now the trap starts. You start looking for ways to fill up your time which frequently involves spending more of your retirement nest egg than originally planned. The trap has now been sprung and you’ve created a new more expensive lifestyle, which is fine, assuming you have the financial resources to absorb the new expense.

A frequently seen trap revolves around the purchase of an expensive “toy” that will pay for itself.


Retiree: “I want to buy this $32,000 bass boat and if I hire out as a guide 3 times a month, I can make the loan payment.”

My response: “But John, you don’t know how to fish.”

Whether the trap develops or not depends on you and how you plan on being fulfilled in your retirement. New careers, hobbies, travels, etc., are expected and encouraged but they need to be part of the overall plan, so the applicable expenses don’t trap you in the future.

Generally, after the first two years of retirement, individuals have found their new lifestyle and the likelihood of entering into extravagant spending diminishes. The key is to have a Financial Blueprint for your retirement, update that Blueprint regularly and be honest with yourself when drafting that Blueprint. Only then can you avoid the “Newly Retired Trap”.

If you have any questions about your own retirement or how to create your own Financial Blueprint, give me a call at (205) 989-3498.

Greg Powell
Wealth Consultant

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