The Adaptable Retirement Part 2: Retirement Planning Isn’t “One and Done”
Your life and career haven't progressed in a straight line.
Retirement won't either.
But that's a misconception, or maybe a hope, that so many folks build into their retirement plans: that, after decades of ups and downs, happy surprises and serious challenges, retirement is going to coast along on autopilot.
Hopefully, you have decades of retirement ahead of you. And those years are going to be just as unpredictable as any other period of your life, with one major new variable guaranteed.
You won't have a paycheck from employment to rely on.
Without the reassurance that more money is coming at the end of the month, too many seniors start making emotional money moves in the moment, whether they're facing a market dip or an unplanned home repair.
That's not the kind of adaptability I was describing in part one of this blog series.
I'm suggesting that if you view retirement planning as an ongoing process, you should be able to reroute when necessary.
And, just as importantly, you'll have a decision-making framework that will help you distinguish between genuine warning sirens and noise you can ignore.
What Could Cause a Retirement Plan to Change?
Grumbling on Wall Street might put a temporary ding in a couple of your accounts. But with the support of a financial plan, it's very rare that the market, by itself, is going to affect your day-to-day life in retirement.
On the other hand, these kinds of events might significantly alter your priorities, your wellness, and how you want to allocate your resources:
A Significant Health Change: A serious medical diagnosis, a change in your ability to get around, or the need for long-term care could affect your out-of-pocket health care spending.
Potential Adjustments: Reevaluate your housing situation, long-term care funding, Medicare coverage, and caregiving relationships. Consider reallocating funds earmarked for travel and leisure or tapping into health savings buckets ahead of schedule.
The Declining Health of a Spouse: Happy, healthy spouses can become full-time caregivers, widows, or widowers in an instant. This transition can affect household income, Social Security benefits, taxes, and independent living.
Potential Adjustments: Reorient the plan around care for an ailing spouse and eventual support for the survivor. Special attention must be paid to avoiding the "widow’s tax" once the survivor moves into single-filer tax brackets.
Unrealized Spending Expectations: Retirement is a new financial experience. If you've budgeted too much or too little, you might feel like your life and your money have fallen out of sync.
Potential Adjustments: Give yourself six months to settle in. If spending is still off, reassess your budget. Break your spending down into Needs, Wants, and Bucket List Experiences. If you're spending too much, refocus on basic lifestyle needs and your top Bucket List priorities. If you're spending less than you anticipated, should you adjust your withdrawal plan? Or should you stop ignoring your Bucket List and start enjoying retirement more?
Meaningful Change in Income or Assets: Windfalls might come from selling your business or receiving an inheritance. Or you might lose an income stream if your health forces you to stop working part time or you struggle to find a new renter for a property you own.
Potential Adjustments: Shift your annual withdrawal strategy to lean on your other stable assets, like cash, pensions, and Social Security, so that your investment accounts can keep growing as long as possible. If you are able to keep working, consider a new part-time job, like teaching or consulting.
A Major Purchase or Commitment: Buying or selling a home, relocating, buying recreational vehicles, and large charitable gifts can all make retirement a little more rewarding.
Potential Adjustments: They can also come with unexpected costs, from maintenance and insurance to cost-of-living adjustments and tax hits. Make sure the all-in price doesn't hurt your overall liquidity or your long-term flexibility.
New Family Responsibilities: You might find yourself wanting to help grown children stepping into adulthood, older family members facing serious health problems, or grandchildren preparing for college.
Potential Adjustments: But you probably can't help everyone forever without putting your own retirement at risk. There's a difference between opening a 529 account for your new grandbaby and writing yet another check to an adult child who is having a difficult time balancing their books. Your plan has to establish guardrails around how much you're willing to give, if you’re expecting repayment, and other ways you can help (like introducing that struggling young adult to your Keen Wealth advisor).
Major Market or Economic Developments: Managing typical market fluctuations is built into a comprehensive financial plan. But a Great Recession, global pandemic, or prolonged inflation aren't typical.
Potential Adjustments: Even in the face of big economic change, there's a difference between panicking and planning. During a prolonged downturn, you and your advisor can reassess your strategy to protect your purchasing power and maintain alignment between your investments and your risk tolerance. Often you'll find "buy low" opportunities that can help grow your wealth when the market rebounds -- which, history says, will almost certainly happen.
Tax, Legal, or Policy Changes: In the ten-plus years we've been producing the Keen on Retirement podcast, we've covered some significant changes to tax policy, retirement age, required minimum distributions, and charitable giving, just to name a few.
Potential Adjustments: And I'm fairly confident that more changes will be coming in the decades ahead. We'll keep covering what's being discussed in Washington in our blogs and podcasts. But once new laws are passed, folks need to meet with their advisors and tax pros to make sure their plans are up to date with the latest rules and regulations.
A Change in Personal Priorities: Even if your numbers hold steady throughout retirement, the life you want to lead may not. Maybe you're just a weekend golfer after all. Maybe maintaining a vacation home becomes too much of a hassle. Maybe you want to spend more time with family and less time on cruise ships. Or maybe you want to put your legacy plan into action while you're still around to see others benefit.
Potential Adjustments: Review your plan at least annually and keep your resources aligned with the people, activities, and experiences that make retirement fulfilling.
Tune Out the Noise
So, what kinds of “events” didn’t make our list?
“Social Security Is Going Bankrupt!”
“The Largest Market Drop Ever!”
“Congress Proposing a Major Tax Hike on Seniors!”
“The Secret to Becoming a Billionaire!”
Stop. Breathe. And don’t click.
Your financial plan doesn’t need to react to social media trends, one bad day on Wall Street, one policy proposal, or the results of one election.
Your plan’s ultimate purpose is your purpose. And as those goals evolve throughout retirement, Keen Wealth can help your plan adapt as well.
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.
KWMG, LLC’s dba Keen Wealth Advisors (“company”) is an SEC Registered Investment Advisor located in Overland Park, KS. The company and its representatives may only conduct business in those states where registered or where excluded/exempt or from licensure. For registration information, please contact the SEC or the state securities regulators for the states where the company is notice filed. A copy of the company ADV is available upon request. Advisory services are only offered to clients or prospective clients where the company and its representatives are properly licensed or exempt from licensure. No advice may be rendered by the company unless a client service agreement is in place. This information is not intended to be investment advice or construed as a recommendation or endorsement of any particular investment or investment strategy and is for illustrative purposes only. Clients and prospective clients must consider all relevant risk factors involved with each strategy, including costs or fees, and their own personal financial situations before trading.
The views outlined in the book, Keen on Retirement Engineering the Second Half of Your Life, are those of the author and should not be construed as individualized or personalized investment advice. Any economic and/or performance information cited is historical and not indicative of future results. Economic forecasts set forth may not develop as predicted.
The Amazon Best Seller ranking listed on marketing materials is specifically referring to Best Seller rankings for the Kindle Top 100 Paid Lists under the subcategories of: Budgeting and Financial Risk Management, based on data as of September 5, 2019 and the second edition under Financial Risk Management on October 26, 2022. Amazon rankings although relevant on how a product is selling overall doesn’t necessarily indicate how well an item is selling among other similar items or similar item categories. Amazon may choose the most popular categories or subcategories within which an item has a high ranking to determine its best seller rankings. These rankings are updated hourly and as a result, should be expected to fluctuate as such. Keen Wealth Advisors and Amazon are not affiliated entities.
The Steve Sanduski Advisor Network, Belay Advisor, LLC and other third-party contributors to our blogs and podcasts are not affiliated with Keen Wealth Advisors.
For additional details on Keen Wealth Advisors, please visit https://www.keenwealthadvisors.com/important-disclosures.
20260804-5812281-18542221