The stereotypical vision of retiring includes gold watches, sun filled landscapes in foreign lands, vacation homes, and lots of smiling faces. We hold on to this vision to get us through the long road of a lifetime of work. A comfortable retirement is our motivation, and ultimately a reward for a job well done. For a few the transition to retirement is wonderful as they waltz into their retirement years with ease. In my observations over the past 25 years, I believe these lucky individuals are the exception, not the rule.
For most the transition to retirement is a very difficult time of their life. The distress that many new retirees feel is not widely acknowledged or discussed. For a life transition that is supposed to be joyous, new retirees often feel uneasy, fearful, and overwhelmed. Many feel like a rudderless ship. Issues surrounding self-worth, mortality, and lack of control can make a person feel anxious or even depressed. Spousal dynamics often change with the new schedule and routine and can be another source of stress, adding to the confusing mix of emotions that are part of this difficult transition.
Some things that I have seen help make the retirement transition easier are to acknowledge and understand that this transition is going to be another one of life’s challenges, and to prepare yourself for a full range of emotions. It’s perfectly normal to feel uneasiness for no particular reason.
Celebrate! Employers rarely throw a party for retirees anymore as most of us ultimately quit our jobs, or are downsized. Even if you retired some time ago, throw your own party or event to let you and others appreciate your accomplishment.
Communication is very important as you navigate the many emotions you will feel. Talk to your spouse, family, and friends openly about how you are feeling and you might find comfort in the fact that many feel the same as you do. Professional counseling can be very helpful.
Most importantly, ease into retirement. Many retirees feel out of control and rush to “take control” and end up making poor decisions about finances, housing or personal relationships when they should be taking a year of “vacation” to let the rhythms and patterns of your retirement life form. Give yourself a relaxed existence as you deal with the wide range of emotions that come with this difficult transition.
As I read many articles about how to select a financial advisor I frequently see mentioned the importance of working with a Certified Financial Planner™ (CFP®). But what does the designation mean, and how does a person become one? Since I am in the middle of working on my designation, I thought I would provide some insight.
If you decide to become a CFP®, here’s the process you would face. First, you must have a Bachelors degree from an accredited university and a minimum of three years of applicable work experience. I’ve got these requirements covered and am working on the next step, which is the educational work. The courses are offered by numerous sources and follow the same general topics. I chose the College of Financial Planning for my coursework.
Each course listed below is similar to a college quarter of studies with approximately 1000 pages of reading and 500 pages of questions and casework. Each course takes about 160 – 220 hours of study and has a final exam. My program includes the below five courses, and starting in 2012 the college will add a sixth “capstone” course that will be casework on the entire program.
Financial planning process and insurance
Income tax planning
When you finish your coursework, you can then sit for the comprehensive exam given by the CFP® board three times a year. It’s a two day test of your knowledge, comprehension, and your ability to apply what you know to cases. The approximate pass rate is 50% and it’s recommended to have an additional 250 hours of study for the exam. The course, materials, testing fees and test prep can easily cost you $5000 – $7000. After passing the exam there are ethics requirements and continuing education. To see a complete listing of requirements and topics, visit www.cfp.net.
To become a CFP® is a rigorous and costly endeavor. The process has helped me to do a better job advising my clients and I can see the value in the recommendation that people work with a CFP®.
Say it out loud: “Today I will schedule a time to talk with my insurance person about an umbrella insurance policy.”
Why? Soaring healthcare costs and the lawsuit-crazy world we live in certainly can put you at risk of exceeding your liability limits on your home and auto policies. An example: you are driving and slide on some ice and strike another vehicle and the driver of that vehicle suffers a broken arm. You would think your auto policy liability coverage should be enough, but in this case the driver is a surgeon who can’t work for 18 months. You could end up with liability above what your policy pays. This is where the umbrella policy will step in and cover much higher limits. Typically, people will get coverage of $1-2 million, depending on their lifestyle.
Umbrella insurance policies are inexpensive assuming you have adequate limits on your existing policies. It will be a good opportunity to review all your liability limits and make appropriate changes to protect your assets. A competent insurance person can help guide you in determining the best coverage for your situation.