How to Safely Descend the Retirement Mountain

For mountaineers brave enough to attempt Everest, the most dangerous part of the journey is actually the descent down the mountain. And like Everest, your retirement journey "down the mountain" can be perilous — especially in the absence of adequate planning — because even the seemingly small mistakes can be catastrophic.

The good news is that you can get ahead of these dangers with a well thought-out and thorough plan.

So there should be a shift in "posture," in which you recognize the approach you're going to employ in retirement will need to be more steady and careful compared to your working years.

I learned this valuable lesson very early in my career. It was 2009 and I was working for a large investment broker. Shortly after getting hired, I met a man in his mid 60s who shared that he never completed a written plan for retirement, and that he also invested most of his retirement savings into his company stock. Unfortunately, his company was GM, and they had recently filed Chapter 11 bankruptcy.  The ensuing result of GM's bankruptcy for common shareholders was a total loss. For the man I met this also meant a lost retirement because he was now forced to continue working. 

Obviously the above is an extreme scenario. But it reinforces three important principles we should all embrace (especially as you near and move deeper through your retirement)...

1.Develop a plan

Work with a CERTIFIED FINANCIAL PLANNER® (CFP). who can help you develop your retirement plan. A good plan will bring into focus your goals and needs, show you if there are any red-flags, and help you understand what can be improved upon.

2. Be honest about your tolerance for risk

How much risk you take is a very personal preference and deserves careful thought and introspection. If you're married, it requires even more time and attention to ensure you and your spouse are on the same page. 

3. Regularly evaluate your plan, your circumstances, and your goals  

We encourage everyone we help to sit down with us at least once per year. During these check-ins, we'll use our time together to get an update on your goals and circumstances. This helps you determine whether or not your plan aligns with your current situation. In other words, we take care to regularly review and update your plan to make sure you're not missing the mark.  

So the takeaway from all the above:

Retirement can certainly be daunting and the descent "down the mountain" is filled with risks. But if your planning is done well, and if you put in the effort to create a strategy that is consistent with your personal risk tolerance and needs, you greatly improve the likelihood of experiencing a fulfilling and steady retirement.