Keen On Retirement™

One of the joys – and challenges – of every holiday season is the hustle and bustle. All that planning, shopping, baking, wrapping, mailing, travelling, and celebrating fills our calendars with unique things to do, all centered around spending time with our loved ones and showing each other how much we care. But once the leftovers are gone and the wrapping paper is recycled, there's a quiet that settles over many of us. You might still be enjoying some time off work. The rest of your regular routine is probably still on pause. Your grown kids may have headed back to college, or back home with their own families. And any pending plans, meetings, projects, or decisions have been bumped to “after the first of the year." In this quiet week between the end of the year and the beginning of a new one, you might find yourself alone a little bit more than usual, enjoying a walk through your neighborhood or a cup of coffee near the fireplace. And that's when some of life's biggest questions often come to the surface, especially if you're nearing retirement.

If you want proof that money alone doesn't buy happiness, just compare these two data points: By any measure, the United States is one of the wealthiest countries in the world -- if not THE wealthiest. And, at the same time, year after year, our collective happiness continues to decline. So, if having more money doesn’t create more happiness ... then what the heck are we all doing? Why are we up at the crack of dawn for our morning commute? What are all those long hours at the office for? Why are we topping off accounts longer than we have to if the ROI isn't making us feel better about our lives and our prospects for the future? A recent poll from YouGov for MarketWatch approached the relationship between money and happiness from a slightly different perspective. I was struck by how the findings align with a core belief we have here at Keen Wealth: financial happiness isn't about accumulating more money. It's about aligning the money you have with your values, your purpose, and a sense of freedom.

Sometimes we have to let go in order to move forward, add on, and grow. That's certainly one of the challenges of retirement. From bucket list travel to grandbabies, most seniors have a lot to look forward to during the Golden Years. But to make the most of this precious time, you also have to leave behind the career that no longer determines your schedule, habits that no longer serve your wellbeing, and even some relationships that might be holding you back. I've noticed that many of the seniors I've worked with over the years don't truly embrace retirement until they let go of these five things:

Two of the saddest words a retiree can say are "If only ..." No one makes it through their entire life without a few missteps. But your Golden Years are supposed to be about enjoying the freedom, relationships, and, yes, money that you've spent decades cultivating. The good news for pre-retirees is that regret isn't inevitable. If you learn from the experiences of seniors who've gone through some ups and downs already, you can plan ahead so you're not spending your retirement dwelling on do-overs. Let’s explore ten of the most common "If onlys" I've heard in my 30-plus years as an advisor and how you can prepare to face them with clarity and confidence.

As they're nearing retirement and finalizing their withdrawal, spending, and healthcare plans, many seniors aren't aware that there's a trap waiting on the other side of the finish line. IRMAA, the Income-Related Monthly Adjustment Amount, is a surcharge that can drive up Medicare Part B and D premiums for high-earning seniors. The catch? IRMAA is based on your modified adjusted gross income (MAGI) from two years prior. That means the Medicare premiums you pay at age 65 are determined by the income you earned at age 63. If you’re approaching retirement, it’s important to think ahead about what your retirement income will look like and how it could affect your Medicare premiums down the road. Proactive tax and withdrawal planning in the years leading up to retirement, and throughout retirement, can help reduce future IRMAA surcharges and keep your healthcare costs in check.

Way back in February 2019 I wrote a blog post titled "Are You in the Top 1%, 5%, or 10% of Income Earners?" While digging into the numbers, I also cautioned folks about worrying too much about how their finances stack up against those of other people, especially if they're looking at life through the lens of social media. Almost six years, one pandemic, and a couple of technological leaps later, both the numbers around wealth and the influence of the media have gone up. The financial trends aren't surprising. High earners tend to be good investors. Good investors tend to have the discipline to stick to their plans through regular ups and downs. And despite those ups and downs, the markets continue to grow wealth for investors. But as we're living more and more of our lives online, I think our view of what "wealth" really means and the true value of money is becoming more and more distorted. Let's take a look at the latest data on affluence and try to gain a little clarity on how these trends might affect your thinking about financial planning and living your best life in retirement.