The Adaptable Retirement Part 1: The Real Challenge of Retirement Isn’t Money – It’s Adaptation
How different was your life 10, 20, or 30 years ago compared to where you are now?
Back then, maybe you were just graduating college, or taking the next big step in your career. You and your spouse might have been wrangling kids ranging from grade school to high school. Maybe you were thinking about buying your "forever home" while also juggling college tuition and a new minivan.
And today? Look at how much has changed! The kids are grown and starting families of their own. Your forever house is paid off. You traded in that old minivan two or three cars ago. And after years of hard work, you and your spouse are finally ready to retire.
But believe it or not, when you look back at the beginning of retirement in another 25 or 30 years, your life will have gone through just as many changes and surprises as you experienced in the decades leading up to retirement.
And that's why your retirement plan can't just run on autopilot.
In my next series of blog posts, I'm going to discuss why comprehensive financial planning doesn’t stop just because you stop working. Effective planning is always an ongoing process, even in retirement.
Preserving the Power to Choose
Financial security gives you the power to make choices.
A successful retirement largely depends on how well you use those choices.
As important as thorough planning and a sturdy nest egg are, the most successful retirees are often the ones who make the most thoughtful choices as their lives change.
That's why back-of-the-napkin math and guidelines like The 4% Rule just don't cut it for long-term planning. They assume that your life and the wider world are going to progress in a straight line.
And that's just not how things work.
The Real Constant Is Change
I asked you to reflect on all the changes your life has gone through in the past couple of decades.
Now think about all the external events.
9/11. The 2008-09 financial crisis. Earthquakes and floods. Wars and elections. Technological advances from the birth of the internet through the smartphone and AI. The pandemic. And bullish and bearish markets reacting to these and so many other uncertain moments.
As you head into retirement, your family probably isn’t done changing either. When you first sat down with your advisor at the beginning of your career, you might not have been married, let alone thinking about setting up 529 accounts for your grandkids.
You’ve probably picked up some new interests over the years as well, from hobbies and sports to philanthropic goals. In the next 30 years, some of these interests will deepen. Others will fade away and be replaced by new things you want to do, new places you want to see, and new people you want to spend more time with.
And, over time, your health is going to change as well, maybe little by little, or maybe all at once. As you and your spouse move off the employer-subsidized insurance that you’ve relied on for decades, you need to be prepared to cover your health needs as they continue to change – including services that Medicare doesn’t cover, like long-term care.
It's impossible to predict what's going to happen in your own life tomorrow, let alone what's going to happen on the other side of the world.
Now, project that uncertainty out for two or three decades.
Your financial plan has to be resilient enough to absorb all kinds of shocks and adaptable enough to maintain flexibility so that you're always making proactive choices, not reactive panic moves.
Course Correction Is Not Failure
If you're on a plane and unsafe weather pops up on the radar, a good pilot isn't going to stick to the original flight plan. He's going to change course and find a better route to get you where you need to go.
That doesn't mean the original flight plan was "wrong"!
The ability to course-correct is a feature of a good plan, not a bug. But when it comes to managing our money, we often equate adjustment with failure.
We feel like we should have seen that market downturn coming and jumped out before taking a loss.
If the roof starts leaking, we feel guilty about the vacation we took instead of topping off our emergency savings bucket.
And when your bills come due at the end of your first month without a paycheck, you might start to worry that you retired too soon.
But the biggest financial planning mistake anyone can make is not having a plan.
The second biggest is failing to adjust your plan when the facts on the ground change, especially in retirement.
A plan you don't have can't help. And a plan that's "perfect" on paper but rigid in practice is going to break under real-world pressures, whether it's a market dip or a sudden desire to relocate.
Strength in Adaptability
To start feeling more comfortable about adapting your financial plan, start by working on being more comfortable with adapting your life.
There's so much pressure to be "perfect" these days. And if you spend too much time on social media, looking at cultivated snapshots of an "ideal" retirement, you might feel like you're doing retirement wrong.
Out here, in the real world, the most successful retirees don't just fail from time to time.
They embrace failure.
They try everything, from pickleball leagues to going back to school. They take vacations to places they've never been before. They try to reconnect with far-flung friends and family. They take piano lessons and sign up for yoga classes.
If a new activity stirs some new learning or feeling of fulfillment, they go back.
If it doesn't, they don't.
If a new relationship blossoms into a real friendship, they put a few more rounds of golf or couples’ dinner dates on the calendar.
If the people around them start sapping their energy, they invest more of their time in more positive relationships.
If they hate that new resort, they share inside jokes with their spouse about the trip for years to come and make it memorable anyway.
And, over time, as they become more comfortable with this lifelong process of trial and error, they become more confident in how their financial plan is prepared to support the hits as well as the misses, the whole journey and not just some "perfect" destination.
Make an appointment to visit Keen Wealth and let’s talk about how our comprehensive planning process can prepare both you and your money to keep pace with a dynamic retirement.
About Bill
Bill Keen is a financial advisor with over 30 years of industry experience. As the founder and CEO of Keen Wealth Advisors, a registered investment advisory firm, he focuses on providing personalized retirement planning designed to help people thrive before and during their retirement years. With a passion for educating others, Bill regularly blogs about retirement planning, hosts the podcast Keen on Retirement, and has contributed to Forbes, U.S. News and World Report, Reuters, Wall Street Journal’s Market Watch, Yahoo Finance, and other publications. Based in Overland Park, Kansas, Bill and his team work with clients throughout the greater Kansas City area and across the nation. To learn more, connect with him on LinkedIn or visit www.keenwealthadvisors.com.
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