The Hybrid Retirement Plan Solution

Dec 18

One of the most overlooked but critical aspects of savings or achieving any financial related goal is determining why you want to save.  That may sound simple, but let me give you an example. 

Client: I want to retire at 55. 

Me: Why? 

Client: I hate my job.

Me: What will you do in retirement, especially one that could last a long time? 

Client: I don’t know. 

The client’s last response is exactly where people begin to run into problems.  It’s not that this person wants to retire early, but instead, that she hates her job.  Not knowing what she would like to do in retirement could be just as miserable as her current job.

When is the last time that you allowed yourself the time to think about what you would like to do now or in the future?

I believe that a professional no matter what profession they have built a career within is going to have a hard time transitioning into a full-time retirement role.  My reasons why include;

  1. Slowing down can have negative consequences. Newton’s First Law of Motion states that a body at rest will remain at rest unless an outside force acts on it, and a body in motion will remain in motion unless acted upon by an outside force.  I have seen several people who hit retirement and stop have massive and sudden health issues. 
  2. Unless you already have developed a strong network of friends who can enjoy retirement with you, most of our strong relationships besides family come from our career.  While work can be frustrating, it is also rewarding in working with people that you like and respect.  Who would you turn to if people such as that were no longer in your life?
  3. You may end of living much longer than you currently think. Old age isn’t what old age used to be.  Going back to Newton’s Law of Motion, more people are staying active, which helps contribute to them living longer.  A married couple age 65, has a 72% chance that one of them will live to age 85 and a 45% chance that one will live to age 90. (Source: Vanguard).
  4. Financially, based upon the previous point of living longer, people may not be able to swing a 30-year retirement plan.

So how does this tie back to the earlier conversation with the client who wanted to retire because she hated her job?

People must begin to allow themselves the ability to think differently about themselves, careers, and what retirement, in general, could and should look like.

My recommendation to clients is to try new things and determine what other areas of “work” may not feel like “work.”  For example, I have several clients who could make a decent go as home remodelers.  They enjoy building things, are good at it, and have a high attention to detail that people would gladly pay for. 

A hybrid retirement is what I am calling this until I come up with a better name.  Bottom line, it is a transitional period from being in a full-time profession that doesn’t support what they really like to do, with a profession that they would like to do which would help persevere their retirement assets and make them last for a longer retirement period.

So how does a person get here?  Well, it first started by me asking a few basic questions and a conversation that followed.  This is part of the intangible value that I bring to my clients and readers. 

It didn’t begin with asking what your income is or net worth.  It began with having a conversation and trying to be of value, which means offering insights that you may not have previously considered.

The TAMMA Family Office is more than wealth planning, portfolio management, and tax preparation.  We help people figure out how they can have a life that they want by having one conversation at a time.