Sep 26, 2018

4 Secrets to a Fulfilling Retirement

By Byron Ellis

Photo credit: Getty Images

You are never too old to set another goal or to dream a new dream.
 - Anonymous

“Byron, I think I’m ready to retire,” said a friend of mine. “If you don’t mind, can I ask you a professional question?”

(This friend and I have always kept our friendship personal—no business.)

“Absolutely!” I said. He’d shared with me recently that he enjoyed my articles, so I was aware retirement had been on his mind.

“Is there a secret sauce?” He laughed at the confused look on my face. “What I mean is…there’s so much to think about. There’s so much information out there. What’s the key? What are the things to focus on that really make or break retirement?”

“Good question,” I answered. “And luckily…you asked the right guy!”

I shared with him my 4 Secrets to a Fulfilling Retirement. And I’d like to share them with you, too.

Secret #1 - Stay active

Hopefully, #1 will be a slam dunk for you.

Because if you’re not active? Changing that could prove your toughest challenge.

Ever heard a retiree say, “I’m busier now than I was while I was working?”

My guess is…they’re travelling, visiting grandkids, staying healthy, volunteering, and much more. They naturally filled their “work void” with their passions.

The reason staying active is far and away #1 is this…Retirement creates a void. For better or worse, a great deal of your identity, not to mention your energy, is tied up in your job. When that goes away, you still have a need for purpose in your life.

You still need to do something.

If you think of retirement as retiring from something, i.e. work, instead of retiring to something, i.e. your life, then this may not be so easy for you.

What to do? First of all, understand that you’re not alone.

According to a Pew Research Study about growing old in America1, the expectations of non-retirees about increased travel, hobby, and family time in retirement are significantly lower than the reality reported by retirees.

It’s easy to paint a rosy picture of what life will be like in retirement, but when the day arrives… it’s just as easy to feel let down.

Second, don’t spend much time worrying about it. Instead, just do something about it!

Start by getting out some paper and brainstorming. Start writing all the things you would like to do or accomplish in your lifetime.

Think about your relationships, health, travel, volunteering, and your passions.

Consider your business aspirations, your chores, your spouse’s chores, etc.

There is no such thing as a bad idea. Write them all down. Don’t hold back.

Looking to make some money while you’re at it? Check out my video on 4 ways to make money in retirement. It’s easier than you might think!

Once your first pass at brainstorming is done, pick one or two items that you can start within the next 30 days.

Do the same thing next month…and the month after that.

Repeat until you find yourself doing the things you always wanted to!

Secret 2 - Automate

One thing that probably isn’t on that list of things you want to do in retirement? Taking care of day-to-day life!

Although you’re retired, your time is still every bit as valuable as it was when you were working—perhaps even more so. Wasting time on tedious chores might seem like an unavoidable cost of retirement…but it doesn’t have to be.

Let’s start with your finances.

The last thing most of us want to do, including myself, is spend time analyzing our portfolio, our expenses, our financial projects, and our financial plan.

To help keep your “financial time” to a minimum, I suggest automating. Here are some things you can set up to happen regularly with no recurring effort on your part:

  • Automate your monthly income (direct deposit)
  • Automate your portfolio rebalancing
  • Automate your subscriptions
  • Automate your bills
  • Automate your computer updates
  • Automate anything else that can be automated

Sometimes automating means delegating. You can really delegate a lot of things these days.

I choose to delegate when I think someone could do a job better…or faster, or cheaper…than I can.

What are things you might delegate to someone that can do a better job?

  • Financial planning
  • Yardwork
  • Minor and major repair jobs around the house
  • Oil changes
  • Travel planning
  • Meal prep
  • Tax prep
  • Portfolio management

I also delegate things that I just don’t want to do. If I can free up my time and replace it with something more valuable to me or, frankly, more fun and appealing, I will do it. Things like:

  • Grocery shopping
  • Home maintenance (i.e. painting, changing light bulbs, pressure washing, window cleaning)
  • Making reservations
  • Sitting on hold on the telephone
  • Researching anything

This one might seem a little tricky, because people rarely delegate anything on that list to someone other than their spouse.

If you need an oil change, you delegate to a mechanic; if you need to adjust your portfolio, call a financial advisor. But sitting on hold with the cable company?

Luckily, there are apps out there than can help with this. Take Magic for example—simply shoot them a text message with your request and sit back as the team of personal assistants at Magic takes care of the rest.

For everything from hiring a handyman to managing your calendar, apps like Magic are a great way to automate even the most general tasks.

Automate with confidence; but if you can’t, consider delegating that task to someone that may be equipped to do things better than you!

Secret 3 - Don’t let the market control you

You know the type…always checking stock prices, ranting on about what they saw on CNBC, espousing the latest conspiracy theory.

If you check the markets as often as a teen checks their social media, you might have a problem.

Don’t be that person!

The problem begins when investments are made in reaction to the market, rather than with a strategy to meet your goals. This inevitably leads to investors worrying about things outside of their control.

49% of Gen Xers are reportedly worried about managing their retirement income—37% of Baby Boomers feel the same way2. That’s a huge problem!

Creating a portfolio to help produce income is a must for most retirees.

Creating a portfolio to help produce income, grow, and allow you to lead a stress-free life? Also a must.

To help accomplish this, we created something that we call the Money Bucket Harvester™ (MBH). The MBH is designed to help deliver growth needed to survive decades in retirement while supporting the monthly income needed to live.

Basically, we set aside 7 to 15 years of your portfolio income need into relatively less risky investments. The rest is invested in growth-focused investments, which will be volatile, although your lifestyle will remain intact.

This method can change your focus from “What are my stocks doing today?” to “How many years of income do I still have left?”

Notice the subtle difference? The first question means you give up all control. The second puts the control squarely back in your hands.

Don’t be controlled by the market. Never put yourself in a position to have to sell anything while its price is low.

Still worried? Here are a few more tips on how to keep your sanity during the next market drop.

Secret 4 - Create a plan and let it keep you on track

You can create a plan on your own…or get the help of a professional. Either way, the important thing to keep in mind is this:

A plan is not a one-and-done activity. It’s not a physical document.

A plan is a process designed to guide your decisions. Simple, right?

The first thing you should do is build up your Emergency Fund, to make sure nothing derails you before your retirement can begin. This should be roughly 3-6 months of income put away for a rainy day.

Once your emergency fund is in place you can start working on a Retirement Budget; this will help you determine how much you can spend in retirement, and for how long. Don’t forget to factor in things like market returns, inflation, and taxes.

Finally, you’ll need a process for taking income in retirement. This can be through the Money Bucket Harvester method we discussed earlier, or through some other income-generating system, but there is one thing you need to do well: never sell anything when it is down. I know this is a big generalization, but when it comes to taking retirement income, it pays to plan ahead.

A true plan is something you use regularly, at least on an annual basis, to see if you are on track. Adjust if needed. Compare your assumptions to reality. Review things like your expense assumption, return target, inflation reality, etc.

It’s not a document clogging up space on your bookshelf.

Minor tweaks to your spending and the other plan assumptions can be the difference between bankruptcy and endowing an inheritance for your grandchildren many years down the road.

The trouble with retirement is that you never get a day off.
– Abe Lemons

That’s what I shared with my soon-to-be retired friend.

Are you ready to look at retirement?

1Pew Research Center. (2009, June 29). Growing Old in America: Expectations vs. Reality. Retrieved from Social and Demographic Trends: style="text-align: left">2Franklin Templeton Investments. (2018, January 25). Retirement Income Strategies and Expectations (RISE) Survey. Retrieved from Retirement Research: https://www.franklintempleton.... style="text-align: left">

Byron Ellis

Byron Ellis

United Capital Financial Advisers, LLC d/b/a Goldman Sachs Personal Financial Management (“GS PFM”) is a registered investment adviser and an affiliate of Goldman Sachs & Co. LLC and subsidiary of The Goldman Sachs Group, Inc., a worldwide, full-service investment banking, broker-dealer, asset management, and financial services organization.

The information contained herein is intended for informational purposes only, is not a recommendation to buy or sell any securities, and should not be considered investment advice. GS PFM does not provide legal, tax, or accounting advice. Clients should obtain their own independent legal, tax, or accounting advice based on their particular circumstances. Please contact your financial adviser with questions about your specific needs and circumstances.

Information and opinions expressed by individuals other than GS PFM employees do not necessarily reflect the view of GS PFM. Information and opinions expressed in this article are as of the date of this material only and subject to change without notice.