You need a realistic spending plan. If you’ve never tracked your expenses before, take the time before retirement to do so. You need to know what it really costs you to live not just have a guess at what you hope to spend. Guessing is just assuming you will never have a home repair or car emergency!
As a part of my series about the “5 Things Retirees Say They Wish They Were Told Before They Began Retirement”, I had the pleasure of interviewing Patti Black.Patti Black is a Certified Financial Planner professional. She works with successful people who want to spend, give, save, and invest wisely. Patti and her husband have teenage twins.
Thank you so much for doing this with us, Patti! Our readers would love to “get to know you” a bit better. Can you share with us the backstory about what brought you to your specific career path?
Iwas in college but not sure what I wanted to be when I grew up. I was looking through the course catalogue, which was a printed publication about as big as “War and Peace,” and saw an introductory class in personal financial planning. I decided to take the class as an elective because I thought the information would be personally helpful. I learned a lot, most importantly, I learned that financial planning was a career where I could help others with their money questions.
Can you share the most interesting story that happened to you since you started your career?
In one of my meetings as a young financial planner, I was surprised by the unhappiness of a client who seemingly “had it all.” He was a neurologist earning over $1,000,000 a year with a home that could have been featured in House Beautiful, several fast German sports cars, and a travel budget that allowed for multiple Instagram-worthy vacations each year. Dr. Smith (not his real name) wasn’t just unhappy, though, he was miserable. He did not enjoy his work, he was overweight with chronic health problems, and he had difficult relationships with his children from his first marriage. I was so puzzled because what I saw in Dr. Smith contradicted a belief that many of us hold: money can buy happiness. My take-away from that experience is that money can be used to make you happier if you prioritize time over money. For example, I have some other (happier) clients who prioritized time by moving to a condominium where several close friends also live. While their condo fees are higher than the expenses they had when they owned a home, they appreciate not having to do lawn work and routine home maintenance. They use their “extra” time to volunteer at a local medical clinic and literacy organization and to meet their neighbors regularly for supper.
Can you share a story with us about the most humorous mistake you made when you were first starting? What lesson or take-away did you learn from that?
I was helping my boss as he prepared for a presentation for our professional organization. When we ended our meeting, I took his notes, which I assumed he was finished using, and shredded them because “a clean desk leads to a clear mind,” right? Unfortunately, my boss still wanted those notes, which by then were in tiny strips. Lesson learned: ask before shredding!
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
My husband, Doug, helps me laugh and maintain sanity when life gets hard. And life often does get hard when you are raising twin teenagers and helping care for aging parents. He does so many things to help including taking over all parental and household responsibilities for a week so my 87-year-old Dad, sisters and I could take a father-daughter trip the past two summers. After my Mom died, it became very important to make new memories with my Dad and sisters.
What advice would you suggest to your colleagues in your industry to thrive and avoid burnout?
We must take care of ourselves so we can take care of our clients. To quote Carl Richards, “In the old framework, we thought of time off as a reward for hard work. But now, I think we need to reframe that and realize that to do high-quality knowledge work, being rested and taking time off is a prerequisite for that. It’s not the reward.”
What advice would you give to other leaders about how to create a fantastic work culture?
Start by hiring people who play well in the sandbox with others. If new employees don’t fit well in the company culture, the company’s culture will deteriorate. Then listen to your employees and make sure they feel heard and valued. Andy Stanley says, “Leaders who don’t listen will eventually be surrounded by people who have nothing to say.”
Ok thank you for all that. Now let’s move to the main focus of our interview. Retirement is a dramatic ‘life course transition’ that can impact nearly every aspect of one’s life. Obviously everyone’s experience is different. But In your experience, what are the 5 most common things that people wish someone told them before they retired?
I interviewed my retired clients to ask what they wish someone told them before retiring. Here’s what I learned from them:
- Health insurance before Medicare begins is expensive! If you can find a part-time job that helps offset that cost, it can significantly help boost your chances of a financially successful retirement.
- You need to know what you are retiring to not just what you are retiring from. Spend time thinking about your purpose in retirement. Who are you and what are you going to be doing now that you’re not working? Playing golf is not a purpose!
- You may need to find new friends if your primary social interaction was with coworkers. You may feel “out of the loop” in retirement. It takes time and effort to find a new “tribe.” Check out volunteer groups, clubs, and classes that interest you as sources for new friends.
- People miss the structure of the work week. Retirees say they appreciate not being stressed by deadlines, but can find it challenging to create a new rhythm to the week.
- Retirement is a major life transition and you have to be patient with yourself and your spouse. Most retired couples do NOT look like those pictured in ads and commercials! Gray divorce, or divorce after age 50, has doubled since 1990 while declining across all other age groups. And, it is most often the wife who asks for divorce after age 50. It is so important to be patient and keep talking during this time of transition.
Lets zoom in on this a bit. If you had to advise your loved ones about the 3 most important financial issues to keep in mind before they retire, what would you say? Can you give an example or share a story?
- You need a realistic spending plan. If you’ve never tracked your expenses before, take the time before retirement to do so. You need to know what it really costs you to live not just have a guess at what you hope to spend. Guessing is just assuming you will never have a home repair or car emergency!
- Because the average 65-year-old woman will spend over $200,000 on healthcare expenses in retirement, it is critical to have good medical insurance. If you’re retiring at 65, you will likely enroll in Medicare Part A and B but will need to research which Medicare supplement plan and prescription drug plan best suits your needs. The plan that meets your spouse or neighbor’s needs may not be the best plan for you. If you’re retiring before age 65, you will not yet be eligible for Medicare and will need to investigate other options. Your employer may allow you to continue group health insurance coverage or you may need to buy private health insurance. As with Medicare, there is not a “one size fits all” answer.
- Understand the tax implications of making withdrawals from your retirement accounts. Many people are unpleasantly surprised that the distributions they take from IRAs and 401ks in retirement are subject to ordinary income tax. Also, keep in mind that the amount of your adjusted gross income determines the premium you pay for Medicare. Higher income may mean higher Medicare premiums.
If you had to advise your loved ones about the 3 most important health issues to keep in mind before they retire, what would you say? Can you give an example or share a story?
It’s important to acknowledge that your plans can change during retirement due to sickness. You may get sick or your spouse may get sick. My client, Don, was an executive at a large company and he found out right after a post-retirement trip to Italy that he had cancer. He and his wife, Sandra, spent the next few years in hospitals instead of hotels and spent thousands of dollars on treatments. This was not the retirement that Don and Sandra envisioned. Sadly, Don died about 3 years into his cancer battle. It’s been 2 years since Don’s death and Sandra is slowly figuring out what retirement looks like for her. She’s gone back to work part-time as a counselor, not because she needs the money, but because of the fulfillment it brings. Sandra also found a friend to travel with and enjoys going on trips to new countries. It’s not the retirement Sandra thought she would have, but, after a lot of time and effort, she’s making it her own.
With that story in mind, I encourage retirees to prioritize:
1.Physical health. Whether it is doing yoga, walking, or practicing martial arts, find a form of exercise you like and do it.
2. Mental health. A study by the Institute of Economic Affairs shows the likelihood someone will suffer from depression rises in retirement. To combat this risk, make sure you have plenty of opportunities for social connections. You might even consider going back to school by participating in Osher Lifelong Learning Institute, which offers noncredit courses at colleges.
3. Spiritual health. What is your purpose in this next stage of life? Again, playing golf is not a hobby not a purpose! Transamerica Center for Retirement Studies found that 97% of retirees are happier because they have a strong sense of purpose.
If you had to advise your loved ones about the 3 most important things to consider before choosing a place to live after they retire, what would you say? Can you give an example or share a story?
I helped my parents move 3 times to different retirement communities, and I’ve learned a lot the hard way. The first move was from their home of over 40 years to an independent living community in our hometown. Mom and Dad settled in, made friends, and lived there for 8 years until my Mom’s health began to decline. When she needed to transition to assisted living, we made the second move to bring them to the city where I live. After hospitalizations left my Mom needing rehabilitation and, we thought, skilled nursing care, we had to make a third move only seven months later. Here are 3 lessons learned the hard way that I hope will benefit other families:
- Select a retirement community that provides all levels of care- from independent living to assisted living to skilled nursing to memory care. After back-to-back hospitalizations, the assisted living facility where my Mom lived said her needs were greater than the care they could provide, so we had to find a new place for her and my Dad to live. This news prompted move #3, which is also known as the time I projectile vomited in the retirement community’s public restroom! Thankfully, the third retirement community also offered rehabilitation, so Mom was able to regain her strength in rehab for several months and then move to assisted living in the same building. Your need for care may change in the future and it is less stressful to stay in the same facility.
- Get the whole family involved in the move and delegate jobs based on individual strengths. Mom and Dad handled most of the first move, but their memory and health declined by the second move so I handled most of those logistics. I still suffer flashbacks from all of the paperwork and questions I was asked! When the third move happened only seven months later, the “projectile vomiting incident” prompted my sisters, who live out of town, to help more. In retrospect, we should have divided tasks for each move based on skill sets. For example, the family member who is more organized may take responsibility for the move day logistics, like hiring movers, changing addresses, and completing paperwork for the retirement community. The family member who is medically inclined could help find new doctors, fill out paperwork (it never ends!) and schedule new patient appointments. The family’s “social butterfly” may be better suited to come and stay after the move to help parents meet other residents and get them involved in activities in the community.
- Take pictures and video of your home before moving. I was so focused on the logistics of packing and changing addresses that I didn’t stop to capture any memories of the home I grew up in and where my parents lived for over 40 years. While not necessary, you might enjoy having some pictures to reminisce with your family and friends.
Is there a particular book that made a significant impact on you? Can you share a story?
I really enjoy reading, so it is difficult to choose just one book. One of the many books that continues to impact me is The Power of Moments by Chip and Dan Heath. The book inspired me to become more intentional about creating memorable moments at work and at home. One of these memorable moments was organizing 50 days of celebrations for my husband’s 50th birthday. Some of the celebrations were small, for example a phone call from a high school friend, and others were bigger, like an inflatable tube man that some friends temporarily placed in our yard, but all of them were memorable!
Can you please give us your favorite “Life Lesson Quote”? Do you have a story about how that was relevant in your life?
Get comfortable with being uncomfortable, otherwise, you may not be growing. “When you stop growing, you start dying” (William S. Burroughs). I was uncomfortable making the decision to leave the advisory firm where I worked for 20 years when it was being acquired by a larger company, but, in hindsight, I can see how I had become stagnant. Since joining Bridgeworth, I’ve had to learn new software, processes and procedures. I’ve also learned new ways to grow my client base. It’s been exary (exciting and scary!) and I’m thankful to be growing again.
What is the best way our readers can follow you on social media?
On LinkedIn at www.linkedin.com/in/patti-black-cfp®-180702100 On Twitter, @PattiBBlack.
Thank you for these fantastic insights. We wish you only continued success in your great work!