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How to Decide When to Retire (or decide anything)

By Thomas Shultz

How to Decide When to Retire (or decide anything)

Isn’t decision-making supposed to get easier as you get older? If our clients are any indication, that’s not the case. It seems like every day in our office clients agonize over questions like when to retire and how to retire. Sometimes to the point that they just let inertia carry them and decide by not deciding. That’s a terrible way to decide!

Here at LYFE Advisors, we have a 10-step process we use with clients who are facing decisions about when to retire or have other big financial or life decisions to make.

Though we’ll hammer on the “when-to-retire nail” more than anything, know that this is the same basic process we advise anyone to use when facing a big decision.

Don’t decide not to decide.


In my life, my big decisions have sometimes lacked the intentionality of the process I’m about to share with you. Let’s step into my past for a minute. Hopefully that doesn’t sound too spooky.

When deciding what college to attend, I knew I wanted it to be a Division 1 or 2 school and on the west coast. I played college basketball and only cared if I could get playing time at the school I chose. I chose Humboldt State University only because they told me I could play 25+ minutes a game.

Dunce-cap decision? Maybe.

It’s still a decent school though.

After college, I made my next big decision to move and stay in Los Angeles only because I was in love with a girl. A really hot, emotionally stimulating, intellectual girl. This girl had the whole package! (Don’t tell my wife.)

Well, I ended up marrying that girl and we’re still together almost 14 years later. (OK, maybe you can tell her.)


More recently, I decided with a handful of partners to go independent from a huge financial firm we worked for at the time.


This time, we might have gone too far in our intentional decision-making process. It took us 3 years before we made the leap. We examined every pro and con, planned things out, and finally went all in to be able to fulfill our vision.

Each of these decisions worked out well for me, partly because I overcame personal inertia in each instance. I decided to decide.


Decisions in your blind spots


If you made a New Year’s resolution to get healthy this year and have broken that by now like everybody else you know, you’ve felt the powerful force of personal inertia.  You avoid making decisions because you don’t like change. Some decisions have to jump onto your scalp and set your hair on fire before you notice that they were ever there at all.


That’s personal inertia.


Inertia in physics is the tendency for a physical object not to change its state of motion. Our lives have inertia, too, and that can blind you to the availability of some decisions.


In my life, this principle became obvious when my wife and I had our son. We both had good careers and incomes at the time, so when Jackson came along, we just shoehorned him into the life we’d already built.  We bought a big, nice, expensive house to satisfy my ego. (Don’t tell my wife that for real.)  Meanwhile, Coralyn and I stashed our son in day care to keep moving along the straight line our careers pointed us down.  It took us a solid two years before we even realized we could have changed direction.  Finally, with our hair on fire from moving so fast for so long, we realized a decision had been there all along, politely tapping our shoulders instead of setting our hair on fire.


We then decided to downgrade from “OUR” (pronounced “my”) ego home, move to a family centered community, allow my wife Coralyn to go part-time and begin to raise our son we’d been handing off to someone else for too long.

Before then, we let inertia get the best of us.


Pre-retirement inertia


I see inertia problems with clients all the time. Often they’ve only come to us after finally seeing an inertia problem.

They stuck with financial advisors who didn’t fit them or serve them well for so long only because it was easiest to leave things the way they had always been.

Others pile up cash that they never put to work for them. Inertia of doing nothing with money carries them past far too many opportunity costs. They could have made more money through investments, gone on huge family adventures, paid down debt, or done any number of things better than swimming in pools of liquidity.


And some people want to retire, but delay doing so because of the inertia of feeling needed at work.

Some of my clients are forced into retirement because they could never make the decision of when to retire. I’ve seen many an unexpected layoff or life event force the issue. They didn’t decide to decide and it bit them.


When you stop questioning the course of your life, whether it be for when to retire or otherwise, you’ve let inertia take the wheel.


A 10-step process to overcome personal inertia and figure out when to retire


If you feel inertia holding you back from deciding when to retire, I want to walk you through this 10-step process I learned a few years back.


It opened my eyes and I think it should help you, too. Follow these steps in order, by the way. That will give you the best indication of when to retire.


1. Trust your gut. I frankly didn’t make it too far past this step when deciding what college to go to or whether to move to Los Angeles. Those decisions still worked out well for me. That’s why this is the first step. Your subconscious sometimes knows what’s going on better than you do.

2. Ask if the decision aligns with your life (or retirement) vision. I’ll write another time about how to set up a retirement vision, but know that without one the demands of others will shape your life or retirement instead of you. Our vision is to change how people think about retirement and help a ton of people indefinitely. So I know that now is not my time to retire. If I were deciding whether or not to retire, I could stop the process here.

3. Do your homework. Research possible outcomes about what retirement could bring you. This is where you bring the “meat” to the decision-making process.

4. Consult people you trust. Don’t ask if you should do something or not. Ask them to help you find blind spots for issues you might not be addressing.

5. Ask if you’re passionate about this decision. Does retiring next year get your juices flowing or are you happy in your career and only thinking about retirement because of your age?

6. Ask if you’ve got the strength to follow through. Be honest with yourself. Does retiring next year give you a to-do list too long to accomplish? You can only handle so much at once, and this is the step to admit that to yourself.

7. Decide if the timing is right. They say timing is everything. That’s true for knowing when to retire. You need to put your financial and personal life in order to know when to retire. If something’s out of whack, walk away from the decision. I once turned down a killer job offer that felt like opening a toy chest to me because I knew the timing wasn’t right for my career.

8. Align the decision to your personal values. I know now isn’t the time to retire for me. Why? It wouldn’t fit with my values because I know I have people to serve doing what I’m already doing. Service is one of my top 10 values, so retirement doesn’t make sense to me.

9. Create a pros and cons list. Note how far down this process analyzing pros and cons is. A lot of times, you’ll find you can walk away from a decision long before making it to this point. Don’t worry about your bullet points on this list sounding stupid. Just capture as many of your random thoughts about retirement or whatever decision you’re facing on this list. Too often those thoughts flit away before you write them down.

10. Analyze the worst-case scenario. Just ask, “What’s the worst that could happen?” Envision your life if retirement doesn’t pan out. Do you have an open door to return to your career? Do you run out of money in six months and have to work anyway?

It’s OK to be wrong sometimes


There’s nothing wrong with being wrong about when to retire. Or just about anything else.


The thing to remember is that if you make a wrong decision, you’ll need to have the flexibility to pivot and adjust your course.


If you’re still overwhelmed about when to retire, find a trusted financial advisor to noodle through your situation. Hold your advisor to a high bar. Work with him or her to move to the next phase of your life.


After all, beyond your career, the next step’s a doozy.

Are you prepared financially for retirement, preserving your legacy, or a medical emergency?

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