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Another Mortgage Paid Off!

Towerpoint Wealth clients John and Yvette Haluck proudly toast the recent payoff of their mortgage, AND John’s retirement, as of December 31, 2018, with two glasses of bubbly! John, Yvette, congratulations to both of you, as we are pleased to have the opportunity to work side-by-side with you, helping you navigate your wealth management plan in accomplishing these two HUGE personal and financial milestones!

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Are You (Emotionally) Prepared for a Dream Retirement? Part 1

From a window high above Capitol Mall in downtown Sacramento, I oftentimes look out over two of Northern California’s great recreational treasures – the Sacramento River and the American River. Sacramento residents love to have a good time outdoors, and value our recreation and the freedom to enjoy life. Whether it be trolling past Clarksburg in a fishing boat, taking a bike ride on the famous American River Bike Trail up to the historic town of Folsom, chatting with a vintner at a local tasting room, or alighting upon a barstool to enjoy a farm-to-fork snack and local craft beer, we are hungry for the independence to do what we want, when we want to. Our desire for this independence extends through our entire lives— through our forties, fifties, sixties, seventies and, if we’re fortunate enough, on and on.

You may have read our post, “Financial Complexities of a Longer Life” back in March. On average, Americans can expect to spend about 20 years in retirement. One out of every four 65-year old’s will live past the age of 90, and one out of every 10 (!) will live past the age of 95.

Achieving this kind of long-lasting independence, while maintaining a comfortable lifestyle, requires discipline, grit, and hard work. And what this independence looks like and means for one person is almost always very different from another, depending on the lens that we use to see life out of.

Retirement, the time traditionally set aside for when the hardest labor of our lives is behind us, should be a time when this independence prevails.

However, most of us do not give significant thought about how our life will really change once we stop working. While most of us recognize how important financial planning for retirement is, at Towerpoint Wealth we we have continued to realize that there are concerns surrounding retirement that have nothing to do with the numbers.

In today’s world, many people are working well past the age of 65 before retiring. Some people who are in good health may not be ready to retire yet, because they need the extra money, like what they do, just want to keep busy, or some combination of all three.

Even if you are still in the fantasy stage and retirement is not in the cards just yet, it never hurts to begin preparing for and considering the emotional change that will occur when retirement does happen and a new chapter of life begins. At Towerpoint Wealth, we have come to recognize that you may want to start preparing yourself emotionally for retirement now, because preparation goes far beyond making sure you have enough money to be comfortable after you stop working.

We can learn how to better emotionally prepare for retirement by asking ourselves a few relevant questions, such as:

    • How do you plan to live when you retire? Do you prefer a house, condo or apartment?
    • Where do you want to live? Will it be near your children? Do you want to be in a city, in the suburbs, or in a rural area? Do you prefer a warm or cool climate? Will you remain in Sacramento, Roseville, Folsom, Davis, or the Bay Area? Or do you want to retire to the Sierra Foothills, wine country, Capitola, or San Diego? Or even internationally or farther afield?
    • Are you married or have a significant other that you live with? If so, how do they feel about your answers to these questions?
  • How is your health and do you anticipate any health challenges affecting your outlook and vision for your retirement?

Considering each of these questions before you retire can better help your psychological adjustment to the change.

If you are married, retirement will be a big adjustment not just for you, but for your spouse or significant other as well. Each partner may have a different idea of a “dream retirement.” In addition, spending more time together can put stress on a relationship, as you will need to adjust to each other’s new schedule, not to mention each other’s daily habits and behaviors, to which you may not currently be attuned.

“We have a house that’s too big for us, but one of the advantages is I let [my wife, Judy] keep the space she’s used to having,” admits Towerpoint Wealth client Larry Britts, who retired at age 63 1/2 after working in the insurance industry for 42 years.

On the other hand, if you are single, it does not hurt to begin thinking about whether spending too much alone time will be detrimental to your health. Studies have shown that a solitary lifestyle may not be problematic, but being flat-out lonely or socially isolated can be. You may want to consider moving near friends or family members, or into an active senior community to foster relationships and stay engaged.

A gregarious single woman, Towerpoint client Ann Martin literally pulled up the stakes on her RV and retired from her sales job in Folsom when she turned 65. She joined a like-minded community of RVers, and for many years she has been a seasonal docent at the Sacramento Wildlife Refuge in Willows, CA. At the refuge, Martin gets to share her love for migrating birds. She’s now 81 years old, and as happy as she has ever been.

Be sure to take your health and physical activity into account when emotionally planning for retirement; not surprisingly, maintaining your health as long as possible will afford you the physical capability to do everything you want when you retire.

Larry retired at 63 1/2 because work stress was affecting his health. “Now I’m freed up to do what I want to do. My blood pressure is down, and I get to have lunch with my Folsom tennis buddies instead of being stuck in Rancho Cordova at work,” he says.

Whether it’s playing tennis or birding, dining, angling, or learning, retirement with a good financial plan and emotional preparation will allow us to take full advantage of the independence it affords.

In our next post, we’ll talk more about how Northern Californians are no different than folks in other regions when it comes to experiencing unexpected emotional challenges that come with the prospect of full time independence afforded by retirement.

We are here to help.

Of course, when thinking about retirement, we cannot forget the financial aspect. As a fully-independent wealth management firm, Towerpoint Wealth is here to help you gain financial confidence and reach your retirement goals as you take on this important life transition. If you’re interested in learning more about how we can help you plan your retirement, please call (916-405-9140) or email us (info@towerpointwealth.com) for a complementary consultation.

Joseph F. Eschleman, CIMA®, President

Download “Are You (Emotionally) Prepared for a Dream Retirement? Part 1”

Disclosures: Towerpoint Wealth is a Registered Investment Advisor. This platform is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Towerpoint Wealth and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Towerpoint Wealth unless a client service agreement is in place. No portion of any content within this commentary is to be interpreted as a testimonial or endorsement of Towerpoint Wealth investment advisory services and it is not known whether any clients referenced herein approve of Towerpoint Wealth or its services; nor should it be assumed that any references to our clients are representative of all our clients’ experiences.

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Are You (Emotionally) Prepared for a Dream Retirement? Part 2

Most of us don’t give significant thought as to how our life will really change once we retire. While we know how important financial planning for retirement is, many of us don’t realize that there are more retirement concerns than just numbers.

In our last post, we asked you to consider how you would answer a few basic but important questions before you retire, in order to better help your psychological adjustment to the change that’s coming: How do you want to live, where do you want to live, are you and your spouse on the same page about retirement, and what lifestyle will your health afford you?

Another factor that can affect our emotional preparedness for the independence of retirement is how tightly our self-identification is tied in with our job title. If you have been a math teacher, or an oncologist, or a mortgage broker for decades, how will you introduce yourself at a party after retirement? And what will you do all day?

Eric Eschleman, Joe’s dad, is the CFO of a large brick manufacturer, and has been working for the same company for over 38 years. Though he and his financial advisor have confirmed that, at age 65, he has reached all of the traditional economic markers for retirement, he anticipates it as joyously as he would anticipate, in his words, “jumping off a 50-foot cliff.”

Eschleman says he’s considered retirement once or twice, but adds, “I’m usually in the office by 6 a.m. – [After retirement] what am I going to do when I get up in the morning?” Taking the step off the plateau of familiarity can be difficult.

What Is Your Identity?

Sacremento Retirement Planning

Because we often intermingle our identity with our career, we can be dealt quite a shock in determining “who we are” once we retire.

To properly prepare for retirement, it’s important to recognize that it is a major life transition that may impact you on an emotional level.

Your self-image is important, and many people identify strongly with their career and the relationships they have kept with it. These identifications can rapidly fall away when you retire, which can be daunting and depressing. Conversely, and perhaps more importantly, this frees up room for new growth in your personal development.

According to retired counseling psychology professor Nancy Schlossberg, there are different ways to approach retirement and finding one’s new identity. These approaches include:

    • Being a continuer: Continuers take something they did as a career and adjust it as they continue on through retirement. For example, a journalist might become an author or start a blog. In these roles, we maintain some form of our work-related identity – just manifested in a different way.
    • Being a searcher:This is someone who investigates different activities, interests, and hobbies once they are retired, similar to how a high school graduate may explore different interests before settling on a college major. Searchers may seek out a variety of volunteer opportunities, take on new projects or hobbies.
    • Becoming an adventurer:People who fall into this category upon retirement typically seek out an entirely new adventure. For instance, an architect may become an artist, or a dentist may become a baker. This type of person considers retirement as a way to make an exciting change in life, and pursue interests they previously had no time to explore or cultivate.
  • Becoming an easy glider or retreater: Two additional post-retirement identities include easy gliders, people who don’t have a set schedule and may do something different each day, or retreaters, those who stay at home until they decide what path they want to take next.

Sacremento Retirement PlanningTowerpoint Wealth client and Rancho Murieta resident Bridget Gransee worked as a regional trainer and director of associate development when she retired at 65. She was a valued employee, professionally recognized, and comfortable in her role at a national department store. Now, post retirement, Bridget is an easy glider: She’s “letting the first year go by,” golfing two to three times a week, reconnecting with people, reading books, and seeing films. “I have no sense of a loss of identity,” she says.

Larry Britts led an 80-person team at the company where he was employed for 42 years and played tennis and pickleball in his free time. Since his retirement, time on the court has moved front and center, as have extended visits with his four-year-old granddaughter with whom he is “forming a close bond.” He and his wife took a trip to Europe this summer and “knocked an item off his bucket list” – seeing Wimbledon. They have already signed up for a “bike and barge” tour next year that will end in Paris. He enjoys that his “health allows him to get actively involved and take time to really get to know and learn about people [he meets].” In Schlossberg’s terms, Larry approaches retirement as a searcher.

Ann Martin turned 65 and took six months to fully retire from a sales career. A true adventurer, she had been preparing for her lifestyle change for several years — paring down her possessions, and purchasing a fifth-wheel trailer and truck to pull it. She started with a brief “vacation” at a riverside campground in Coloma, then began exploring opportunities with the State Parks, integrating her lifelong hobby (birdwatching) into a post-retirement avocation.

Eric would like to be, in Schlossberg’s terms, a continuer. He sees the optimal situation as having a post-retirement job that is “special-project driven.” One where he could “keep busy, but on a not-so-regular basis.” And when he’s not working on a project, he could spend more time traveling—to Europe, to the Caribbean, and of course, out to California to visit his family.

Purpose and Retirement

Having an emotionally healthy retirement means acknowledging that you are literally turning the page to a big new chapter of your life, transitioning into a new lifestyle that includes new friends, experiences, and most likely, a new identity.

Don’t forget to be flexible, realistic, and patient with yourself when setting retirement goals and determining your new lifestyle. You will be hungry to figure it all out as quickly as possible, but will be happier if you realize you can’t control everything, and that sometimes you just need to relax and have faith that things will work out. Let go and let life happen. Or, as the poet Rumi said: “Try not to resist the changes that come your way. Instead let life live through you. And do not worry that your life is turning upside down. How do you know that the side you are used to is better than the one to come?”

When you look out into that next season of your life, what do you see?

We are here to help.

Of course, when thinking about retirement, we cannot forget the financial aspect. As a fully-independent wealth management firm, Towerpoint Wealth is here to help you gain financial confidence and reach your retirement goals as you take on this important life transition. If you’re interested in learning more about how we can help you plan your retirement, please call (916-405-9140) or email us (info@towerpointwealth.com) for a complementary consultation.

Joseph F. Eschleman, CIMA®, President

Download “Are You (Emotionally) Prepared for a Dream Retirement? Part 2”

Disclosures: Towerpoint Wealth is a Registered Investment Advisor. This platform is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Towerpoint Wealth and its representatives are properly licensed or exempt from licensure.

Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Towerpoint Wealth unless a client service agreement is in place. No portion of any content within this commentary is to be interpreted as a testimonial or endorsement of Towerpoint Wealth investment advisory services and it is not known whether any clients referenced herein approve of Towerpoint Wealth or its services; nor should it be assumed that any references to our clients are representative of all our clients’ experiences.

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Financial Complexities of a Longer Life

Financial Complexities of a Longer Life

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Americans are living longer. That’s the good news. The bad news is that most people aren’t financially prepared. Many Baby Boomers will be in retirement for over 20 years and unfortunately, many aren’t saving and investing with a longer life-expectancy in mind.

There are serious consequences to financial planning around the wrong life expectancy. Some retirees are working later in life; others live in fear of running out of money, while others are leaving less of a legacy than they hoped. No one wants to run out of money in retirement.

How Long Should You Expect to Live?

The Social Security Administration notes that at 65-years old, the average man can expect to live to roughly 84.3 years of age, whereas the average 65-year old woman can expect to live until age 86.6. This means that on average, Americans can expect to spend about 20 years in retirement.

However, there is a strong chance that you should plan to be in retirement much longer than 20 years. One out of every four 65-year olds will live past the age of 90, and one out of every 10 will live past the age of 95. Are you prepared for three decades of retirement? Most people aren’t.

With these figures in mind, here are 4 steps that can be taken to ensure your financial longevity:

Step 1) Develop a Clear Vision of Your Retirement Lifestyle

To create a well-conceived plan and have the will to faithfully execute it, you need a clear vision of your lifestyle in retirement. Start by defining your goals and asking yourself:

  • Where will I live?
  • Where will I travel?
  • What will I drive?
  • How will my hobbies change?
  • Where will I donate my time and money?

It’s important to factor realistic spending assumptions into the cost of your retirement, based on your goals and desired lifestyle. Your plan should also include contingencies for health care costs and unexpected expenses.

Step 2) Address Your Concerns

As we live longer, the trend continues to be to work longer, but oftentimes in a more meaningful and less economically-driven fashion. The act of retiring today is rarely black-and-white, and concurrently, the financial and retirement planning surrounding this life transition is by no means static. As the experience of a major life event takes place, our experience in helping clients in properly coordinating all of their financial affairs has exposed a few common concerns:

  • How do I properly draw income from my various investment accounts once I am no longer saving money?
  • What are the tax consequences of my various retirement income sources?
  • How do I ensure that the retirement income I am taking is sustainable over the next 20, 30, 40+ years?
  • What do I need to do to be confident I will not run out of money before I die?

Step 3) Adjust Your Investment Strategies

Start to plan for a longer retirement by adjusting your investment strategies — like saving more, being slightly more (or less) aggressive with your investment strategy, etc. We ensure our clients have these bases covered, so consider calling us if you’d like someone to review your investment strategies.

Step 4) Consider Your Health Insurance Options

Health insurance is the most expensive and bothersome insurance the average individual carries. Unfortunately, many people approach retirement and believe that the burden of health insurance will be lifted. In reality, even when covered by Medicare and other supplemental insurance plans, there are still substantial costs left for the individual to pay.

In addition to premiums, deductibles, and co-pays, prescription drug costs are likely to rise. In the last decade, the average annual cost of one brand-new drug used to treat chronic health conditions cost a senior $5,800 (2015), compared to $1,800 less than a decade earlier (AARP). Planning for a longer retirement requires keeping a keen eye on the rising cost of healthcare in the US.

Understanding the stresses that come with ensuring your financial longevity, we’re here to help you sort out the complications of an ever-changing financial plan. Contact us to review your retirement, legacy, and estate plans. Together, we’ll create a clear strategy that points you toward a comfortable retirement, whether it lasts one decade or three.

We Are Here To Help

Living a longer life often creates financial complexities. We encourage you to call (916-405-9140) or email (info@towerpointwealth.com) us with any concerns, questions, or needs you have – we are here for you, and look forward to connecting with, helping, and being a direct, fully independent, and no-strings-attached expert financial resource for each of you.

Disclosures: Towerpoint Wealth is a Registered Investment Advisor. This platform is solely for informational purposes. Advisory services are only offered to clients or prospective clients where Towerpoint Wealth and its representatives are properly licensed or exempt from licensure. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Towerpoint Wealth unless a client service agreement is in place. No portion of any content within this commentary is to be interpreted as a testimonial or endorsement of Towerpoint Wealth investment advisory services and it is not known whether any clients referenced herein approve of Towerpoint Wealth or its services; nor should it be assumed that any references to our clients are representative of all our clients’ experiences.