Oct 3, 2024
Just think of all the numbers associated with retirement. Hang up your hat at 62 or 65? Wait to take Social Security until 67 or 70? What about the 4% rule? Do you truly need seven digits in your nest egg? And how many times will you second guess yourself trying to figure all this out?
By the time you add it all up, perhaps you’ll despair ever getting the calculus right. But one retirement expert and author supports the argument that “retirement is not a math problem.”
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“Just stop it, people, if you’re just focusing on the calculators and all that stuff,” Christine Benz said on an episode of Morningstar’s podcast “The Long View” posted Sept. 17. “You should do that but ‘don’t stop there’ is the point … there are several aspects of having a happy and successful retirement that maybe are under-discussed.”
Overlooked in the retirement equation
In writing “How to Retire: 20 Lessons for a Happy, Successful, and Wealthy Retirement,” Benz sat down with other personal finance aficionados. They include Ramit Sethi, host of Netfix’s “How to Get Rich,” who talks about optimizing happiness, and HerMoney podcast host Jean Chatzky on how women need to approach retirement differently.
“People might be surprised to see a book from me that is half non-financial — maybe not even half,” Benz told MarketWatch. “But I feel like people are overly focused on the financial and not enough on the non-financial.”
To be clear, as Morningstar’s director of personal finance and retirement planning, Benz doesn’t suggest you ditch attempts to calculate or extrapolate your portfolio. In fact, one of her co-authored books is the “Morningstar Guide to Mutual Funds.”
And to that end, “How to Retire” does unpack some financial strategies for retirement security. On the subject of withdrawal rates from a portfolio, Benz points to the wisdom of tweaking them on a year-to-year basis based on the health of your holdings.
But she also stresses the need to assess and then embrace the non-financials that make retirement well worth the adventure, a lesson she learned while penning her new book. On the Morningstar podcast, Benz talked about how doctor and personal finance expert Jordan Grumet impacted her as she crafted the final chapter.
“He talks about what he calls the ‘Big P’ purpose, which are the really aspirational things like climbing Machu Picchu or starting a foundation.”
So, how do you strike a balance between retirement’s facts of math and facts of life? Here are three ways to reframe your post-work existence for the better.
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Retirement success redefined
Maintain and build relationships: There’s much more to “community” in retirement than moving into a retirement community. Gather regularly with friends and family, and nurture your relationships with those closest to you. “Several of the interviewees hit that concept hard. The importance of maintaining relationships later in life,” Benz noted.
Get ahead of life’s health changes: If you’re in good health at 60, it’s easy to assume you’ll stay that way. But smart retirement centers on planning for a time when you may be less mobile or unable to drive, for example. Beyond the financial, you may also be able to aid yourself in a practical way. “It’s not too late to improve,” Benz said, including, “modest lifestyle adjustments for people who maybe have been inattentive to their health up until this point, even if they’re in their 60s”
Wind down gently: Like slamming the brakes on a speeding car, going from full-time work to none at all creates massive disorientation and can exacerbate feelings of loss and burnout. Retiring in stages can ease the transition. For her own part, Benz is trying “mini-retirements, or sabbaticals” from her day job that allow her to rest and explore options in education. “I want to try to continue to do the aspects of my work that make an impact,” she told MarketWatch. “And I think about shedding the things I don’t enjoy as much.”
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Lou Carlozo is a freelance contributor to Moneywise.
