3 Ways to Make the Retirement Transition Easier

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#62 – Is transitioning to retirement as simple as flipping a switch? One day, you just stop working and enjoy the rest of your life, right?

Well, not exactly…

According to Barbara O’Neill, retirement is a combination of 35 different switches, each indicating a financial, social, or a lifestyle transition.

In this episode, Jeremy Keil interviews Barbara O’Neill. As the author of the book “Flipping a Switch: Your Guide to Happiness and Financial Security in Later Life,” Dr. O’Neill highlights some of the biggest changes that you can expect to face during retirement and how to cope with them.

Barbara discusses:

  • Lifestyle transitions you might never think about (until they hit you in retirement)
  • How to flip the switch from being a saver to spender
  • The FIND mindset: Financial Independence, New Directions
  • Pro-tips to help you become financially resilient
  • And more

3 Ways to Make Your Transition to Retirement Easier

Once you retire, you get to call your own shots!

Your taxes, where you withdraw your money from, how you spend your day, who you remain connected with — it’s all up to you. It might feel like a drastic change, but don’t worry.

Read on to learn 3 ways to make your transition to retirement easier!

1) Asking the Right Questions

While creating a retirement plan, it’s important to address both the financial and nonfinancial aspects of your life.

For instance, think about:

  • How can you effectively manage your required minimum distributions?
  • What are some ways to maximize your Social Security and pension?
  • How would you keep yourself busy after you leave your work?
  • What are some things that you’ve always wanted to do in life?
  • Is moving to a new location the right choice for you?
  • How will you make new friends and remain connected if you move to a new location?
  • What level of care you might need during retirement?

The list goes on…

If you want to take a deeper dive into the financial, social, and lifestyle transitions that you can start preparing for, check out Barbara O’Neill’s book: “Flipping a Switch: Your Guide to Happiness and Financial Security in Later Life.”

2) The Most Important Switch: Saver to Spender

After working hard your entire life to accumulate wealth for retirement, it’s not easy to watch that balance go down.

The fear of running out of money might hold you back from living your retirement dreams.

But Dr. O’Neill has said it best, “If you don’t spend your money, somebody else will.” So, create an effective spending plan for your retirement, project how much money you might need every year, and then, spend without worry!

Not sure how to do that? Consider consulting a financial advisor to help you flip the most important switch of retirement: from saver to spender.

3) Build Financial Resiliency

If the COVID-19 pandemic has taught us anything, it’s the importance of resiliency.

Over the past few months, businesses suffered huge losses and several people lost their jobs. A lot of people even lost their loved ones.

To help you be prepared for such crises in the future, here are 5 pro-tips by Dr. O’Neill:

  • Maintain a low debt-to-income ratio. This includes all consumer debt excluding mortgages, such as car loans, student loans, and credit card payments. A best practice would be to maintain a debt-to-income ratio of less than 15%.
  • Establish an emergency fund. Having saved nearly 3-6 months’ of essential living expenses can be a major help during a crisis.
  • Learn to earn. In other words, keep yourself marketable and employable by continuing to build your knowledge, experience, and skills.
  • Get insurance. Some common ones include life insurance, disability insurance, and property insurance.
  • Never stop learning about personal finance! Knowledge is power. Potential resources can range from pursuing additional designations to something as simple as listening to a podcast!

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Don’t forget to check out the resources below to learn more about transitioning to retirement.

If you have any questions, feel free to contact us or reach out directly to Barbara O’Neill using the information below!

Resources:

Connect With Barbara O’ Neill:

Connect With Jeremy Keil:

About Our Guest:

Dr. Barbara O’Neill, CFP(R), AFC is the owner/CEO of Money Talk: Financial Planning Seminars and Publications. She writes, speaks, and reviews content about personal finance. A Distinguished Professor Emeritus at Rutgers University, she has written over 160 articles for academic publications and received over 35 national awards and over $1.2 million in grants to support financial education programs and research. She tweets daily personal finance information using the handle @moneytalk1

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