As I approach retirement, I ask myself this same question all the time. Can I retire on purpose or should I just hold back?
On The Small Business Radio Show this week, I talked about this with Zachary Larsen, Certified Financial Planner (CFP) and founding partner of Intentgen Financial Partners.
Here’s what we discussed:
Understanding Retirement With Purpose
Zachary emphasizes the importance of intentional retirement planning, a concept that encourages people to retire on purpose rather than by chance. Many people, especially small business owners, tend to be busy in their daily lives, neglecting important financial discussions and planning. Zachary’s approach focuses on changing the mindset from accumulating net worth to generating sustainable income.
Key Takeaways:
Rest in Something, Not in Something: Zachary shares valuable insight from a mentor, highlighting the difference between retirement as an escape from current circumstances versus retirement to pursue new passions and opportunities. This mindset shift can lead to a fulfilling and meaningful retirement.
Income Strategy: Instead of focusing solely on the whole thing, which can be volatile and cause emotional stress, Zachary advocates an income strategy. This approach emphasizes generating income from assets to support retirement goals, ensuring a stable and reliable financial base.
Practical Advice for Retirement Planning
- Start Early and Plan Ahead
Appropriate Time: Zachary suggests that people should begin serious retirement planning 5 to 10 years before their intended retirement date. This allows enough time to adjust strategies and ensure that financial goals are met.
Monte Carlo simulation: Use tools like Monte Carlo simulations to assess the likelihood of reaching retirement goals based on various financial scenarios. This can give a clear picture of the possible outcomes and help in making informed decisions.
- Focus on Generating Income
Diversify Income Sources: Make sure your retirement plan includes multiple entryways, such as investments, rental properties, or part-time work. This diversification can provide financial stability and reduce reliance on a single source of income.
General Review: Make regular reviews of your retirement plan to adjust for changes in the market, your personal circumstances, or financial goals. Staying active can help reduce risk and take advantage of opportunities.
- Engage in Meaningful Activities
Volunteering and Hobbies: Barry Maltz shares his desire to engage in volunteer work and participate in causes he cares about during his retirement years. Seeing meaningful activities can provide a sense of purpose and satisfaction.
Lifelong learning: Consider pursuing new skills or hobbies you enjoy. Lifelong learning can keep you mentally engaged and active, improving your overall quality of life.
The Role of Financial Advisors
- Find an Accountable Partner
Trusted Advisors: Zachary emphasizes the importance of having an accountability partner, whether it’s a financial advisor or a trusted friend. This person can help you stay on track with your retirement goals and provide valuable guidance.
A Judgment Free Zone: Ensure that financial discussions are conducted in a non-judgmental environment, allowing you to express your wishes and concerns without fear of criticism.
Listen to the entire episode on The Small Business Radio Show.
