In this post we’re going to look at the first step to take when you’re planning your retirement. If you’re already retired, don’t worry, it’s not too late for you to do this too.

The first step to take when creating your plan is something that you’ve probably heard of. However, not many people put that much emphasis on this, or sometimes they skip right over it. And interestingly, most advisors skip it too because if you don’t take this step, your financial plan can usually still work perfectly.

But, if you’ve seen any of our other videos or talked to one of our advisors, then you know that we at Streamline care as much about the non-financial side of your retirement as we do about the financial side. We know you need both working together in order to live a fulfilled next stage of life, one full of joy and purpose and passion. Just focusing on the money piece of your retirement plan isn’t going to get you there.

The most successful retirees that we’ve seen took the time to get clear on their why.

They took the time to think about: why are we even retiring in the first place?

  • Is it because of I’m a certain age?
  • Because it’s the social norm that says I’m supposed to do it at this time?
  • Is there something I want to do more of?
  • Am I running away from something that I dislike?
  • Or am I running towards something that I enjoy more and want to have more time allocated to?

Getting clear on your why can help you find the answer to that almost impossible question: how much is enough? When you know your why, planning for retirement becomes a lot less daunting because you have a clear target that you’re aiming for. Then you can implement the retirement plan and the investment strategies that will give you the greatest chance of reaching that target.

A Story About Susan

Susan called me up one day and she was looking for a second opinion. She was 58 at the time, and she had just received a plan from another advisor that said she and her husband had to work until they were 70 if they want their plan to be successful. If they wanted to continue their lifestyle, then they would have to work another 12 years. But the advisor didn’t take the time to listen to Susan and her husband’s story and figure out their why. He didn’t find out what’s most important to them. What he did (which is pretty common in retirement planning) was take the numbers and the data, then he told her what’s possible with those numbers.

Just because that’s the way 99 percent of advisors create a financial plan, doesn’t mean it’s the best way. And it certainly doesn’t mean it’s the best way for you. What I’ve seen the best advisors do is listen to their client’s stories. First, by asking questions that the client maybe never thought about, getting really clear on what’s most important and where they want to be. And then fitting the numbers into their story rather than letting the numbers go first. If this advisor found Susan’s why first, he would have found out that the most important factors to their successful retirement would be proximity to their kids and their faith. Those are two of their main values that we uncovered.

Next, Susan and I walked through the Streamline System and we worked around those top two values. Their kids were in South Carolina and in the original plan, they had budgeted for four annual trips. They lived in Illinois and then they were going to go down to South Carolina four times a year. So we began looking at some of the what if scenarios of different expenses and costs and different ideas that they could apply in retirement. We weren’t making any decisions. We were just exploring and discussing the different options. What Susan and her husband really wanted to do was be together with their grandchildren more than four times a year, especially while those kids were under 10 years old. If they listened to the original financial advisor and followed that financial plan, this never would have been possible.

Letting Why Chart The Course

But once we discovered their why, we took them through a series of crucial questions to help design that ideal future that they were looking for. A few of the questions were things like: is your current home your forever home? They decided they loved it, but without their kids and grandkids, it wasn’t the same.

And would you really want to commit to South Carolina? They didn’t know; they couldn’t answer that right now. So we decided not to commit. What they decided to do instead was rent a condo in South Carolina for a year, take it for a test drive. They’d keep their Illinois home and not make too many big transitions. While this meant spending more money initially, it was for a short term only, with the knowledge that within five years they would have to make a decision.

In order to afford the condo in South Carolina while maintaining their Illinois home, they made a few adjustments to their planned living expenses, like club dues and entertainment in downtown Chicago. With this plan in mind, Susan and her husband retired from work two years later; 10 years before the original advisor’s plan. They started renting in South Carolina. After a year, they were ready to commit. They sold the Illinois house. They bought in South Carolina and they’ve never been happier. They’re close to their family. They’re creating a new community within their church and they’re doing great.

Your Next Steps

Now, what are the next steps for you? Bring this conversation up to your financial planner. Get clear on your why and make sure you incorporate it in your plan. Really, make sure you start with that.

If you need help, please reach out to me, I’d be happy to talk with you, or click here for a free DIY Retirement Plan.