Q: We now find ourselves fast approaching retirement. Our current financial planner has been very good in the accumulation phase of our lives, but we are having our doubts about whether he would be the best planner for the distribution phase. Any help that you could provide would be very much appreciated.
Greg and Susan
A: Good question, one that more people are asking these days. "The short answer is yes, it's a completely different conversation," says Mitch Anthony, founder of the Financial Life Planning Institute and author of "The New Retirementality."
Not all financial planners are well-versed in withdrawal calculations. Henry "Bud" Hebeler, founder of the website Analyzenow.com, recommends that if you want to continue working with an adviser, to get the names of a couple of fee-only certified financial planners in your area. The main website for finding fee-only planners is the National Association of Personal Financial Advisors at www.napfa.org. Interview several about how they would work with you to plan for this next stage of your life.
I'd also ask questions of these potential professional advisers that run deeper than basic finances. The reason is the rise of a new vision of the retirement years. Surveys repeatedly show that baby boomers plan on earning an income well into the traditional retirement years. (Think part-time and flexible schedules.)
"These transitions may involve pursuing employment that is more personally fulfilling but less financially rewarding than previous jobs," writes Richard Johnson, labor economist and senior fellow at the Urban Institute in "Later Life Job Changes before and after the Great Recession." "They may involve moves from wage and salary jobs to self-employment. Or they may represent a gradual shift into retirement."
The financial returns to working longer are attractive. Social Security benefits are more than 75 percent higher at age 70 than at age 62. Earning an income allows older workers to continue saving. Holding off the day of retirement means you'll have to support yourself off savings for a shorter period of time.
Instead of asking, "what is my number," people are wondering, "what do I want to do next?" How can I marry meaning and money, purpose and a paycheck in the next stage of life? What are the financial and emotional implications of working longer? In my interviews with financial planners I'd see how they can help you design your "what's next?"
Chris Farrell is senior economics contributor, "Marketplace," and economics commentator, Minnesota Public Radio.
