What to Expect When You’re Retiring

RetirementNo matter how much you prepare for retirement, there will be some surprises–both financially and emotionally.

If you’re a small business owner, when it comes time to turn over the reins, this can actually be an emotional process. “Each business owner goes through their own transition,” notes Seth Deitchman, financial adviser/portfolio manager at The Mercury Group at Morgan Stanley. “The transition is emotional and sometimes challenging. The business owner is leaving their legacy and it’s sometimes very difficult for them to fully walk away. Business owners will often stay on the board of directors or sometimes have a small consulting agreement. This sometimes makes the transition easier. Like anything else, when you go cold turkey from anything it is difficult and the person goes through withdrawal.”

Having a succession plan in place is key to making it smoother and less of an emotional drain. “If no planning is done, there can be boredom, which can lead to health issues and challenged relationships,” says Deitchman.

Besides planning for the succession of your business, you need to plan for yourself. And not just financially. But how will you fill your hours that were previously spent working? “One of the most overlooked areas regarding the initial years of retirement is having a good plan for your time. Many times, folks may feel they have adequately prepared for the monetary implications of retirement or have worked with a financial planner to better understand their retirement lifestyle, but often people forget about the significant increase in free time,” PJ Wallin, CPA, CFP and founder of from Richmond, VA-based Atlas Financial, points out.

This is a time you can pursue old passions–or new ones. “It’s important during the later stages of your career to take a step back and better understand what you?re passionate about, so that you can fill your time with those activities once your day-to-day job slows or stops,” says Wallin. “A nice way to ease into retirement is to go, part-time, towards the end of your career or to find consulting opportunities. Oftentimes as a retirement financial planner, we see folks most happy when they either ease their way into retirement or keep themselves busy with non-profit activities that are meaningful to them.”

“Enroll in a course, pick up a hobby, volunteer. Do something to break up the monotony. Keep your brain and life moving even after retirement,” says business coach Chantay Bridges.

Planning financially is vital. You don’t want to find yourself short on cash every month. plan ahead. Some tips:

–Take into account lifestyle changes and how much you want to maintain your current lifestyle. “For example, find out your annual cash flow needed and allowable spending based on savings,” says Wallin.

–Risk reassessment. “Don?t stretch to live a higher lifestyle in retirement; make sure to assess the risk in your portfolio and be able to wait out another downturn like 2008/09,” reminds Wallin.

–Hold off on SS. If you can, Wallin suggests delaying receiving your social security payments.

–Don’t forget that your benefits will disappear. “Yours and your spouse’s benefits will no longer be covered by your employer,” says Bridges. So make provisions for this. “While you both may qualify for Medicare, that does not include life insurance and matching contributions to 401k and other savings plans. This can place an increase in your monthly expenditures overnight.”

–You have to stay on budget. “You may lose flexibility in spending. Some, after retirement, find themselves on a strict fixed income. If this happens, you have to re-think your spending habits and patterns to complement your new lifestyle,” notes Bridges.