ON THE ARRIVAL: THINKING ABOUT RETIREMENT WELL BEFORE RETIREMENT
- Posted by Jeff Baumert, AIF®, CIMA®
- On March 3, 2017
- financial planning, goals, plan, retirement
You’ve worked hard and logged tens of thousands of hours transiting the globe. Along the way, you’ve deftly handled a handful of minor emergencies, and perhaps even one or two that left your knees weak.
You’ve smiled and waved at thousands of satisfied passengers as they safely departed to the next stage of their travels.
You have endured scores of check rides with both check pilots and the Feds. You’ve trained with simulator instructors with endless suggestions and “techniques” on new ways of doing what you’ve done for years. You’ve missed birthdays, holidays, and even the occasional anniversary.
Now, you’re entering the arrival phase of what has been a very fulfilling career. You may not be on your final approach yet, but you know that the terminal phase of your career is drawing near. Hollywood hopefully won’t be making a movie about you with Tom Hanks in the starring role, but you’re proud of your long career as a professional aviator.
HOW YOUR CAREER AS A PILOT IS LIKE PLANNING FOR RETIREMENT
There are many parallels that can be drawn between your career as a pilot and your preparation for a secure retirement. For example, as you initiate the arrival into a complex airport traffic area, you carefully consider your final approach options, terminal procedures, and contingencies, all while you continue to precisely direct your aircraft on the arrival profile. Often, due to weather, traffic, or other factors, it’s uncertain what the terminal phase of flight will look like.
In these cases, because you’re a professional who couples skill, preparation, and the ability to adjust when needed, you safely deliver your passengers to their destination on schedule. They thank you as they deplane, oblivious to the evaluations, decisions, and actions that you took to ensure their safe arrival.
Just like the passengers on your flights, some of your peers who are enjoying a fulfilling retirement have overlooked what it took for them to get there – skill, preparation, and the ability to adjust when needed. And like your passengers who rely on your professionalism to help them reach their destination, often your peers have relied on an advisor’s professionalism to help them reach their financial goals.
Your knowledge as a pilot is multidimensional, encompassing more than simply altitude and airspeed management. The same is true of your financial advisor; professional financial advice is about a whole lot more than just investment management. Just as altitude and airspeed don’t do much for you if you don’t know where you’re going, investment management without the context of a financial plan or lifestyle goals is incomplete.
UNDERSTANDING THE BIG PICTURE
A big part of retirement preparation is knowing what retirement looks like for you. We often work with individuals and couples who have embraced financial planning and fiscal discipline early on, putting them in great financial shape for retirement. In other words, the decision to retire is not based solely on money. Many of these people can retire well before the decision is made for them, due to failing health or the required retirement age.
Despite this fact, even though they have achieved or exceeded their financial goals, many pilots struggle with the terminal phase of the approach. Perhaps they have set the age of 62 as a target for retirement and are financially prepared to realize that goal, but haven’t thought about what they will do in retirement. We occasionally see these people struggle to retire and enjoy the fruits of their hard work and discipline.
I will always remember a poignant moment with a couple who had reached the age of their planned retirement. Although they had exceeded their financial goals, the husband was agitated and full of anxiety. He was as financially sound as anyone I’d ever worked with, but he wasn’t ready for retirement. Understandably, his identity was still closely tied to his career with the airlines, and he hadn’t spent any time thinking about who he would be once he no longer took to the skies.
With current life expectancies, retirement will represent up to a third of their life for many people. If you want to successfully transition into an enjoyable retirement, it’s important to plan and think about what that period will look like beyond financial considerations. Will it include travel, volunteer work, golf, and family? Will it be a second career in an area that has always interested you?
WHAT WILL YOUR RETIREMENT LOOK LIKE?
There are as many post-retirement lifestyle choices as there are people to make them. Whether you’d like to be a tour guide or a post-retirement real estate tycoon, the time to think it through is well before the final approach. As you approach retirement, commit the time, and perhaps travel, to explore your options and contingencies.
Just as a pilot works diligently to successfully deliver his or her passengers safely every day, a professional financial advisor will work to create, monitor, and adjust your financial plan and help you achieve the retirement lifestyle you desire. The key is creating your financial plan, and starting on the journey that plan lays out for you, well before you begin your final approach.
RAA has helped thousands of airline families successfully plan for and achieve a secure retirement. No matter where you are on your own financial journey, it’s never too early or too late to begin working on your financial plan. Request a call with an advisor at RAA to get started on your plan today.
Disclaimer: This blog is intended for informational purposes only and should not be construed as individual investment advice. Actual recommendations are provided by RAA following consultation and are custom-tailored to each investor’s unique needs and circumstances. The information contained herein is from sources believed to be accurate and reliable. However, RAA accepts no legal responsibility for any errors or omissions. Investments in stocks, bonds, and mutual funds may increase or decrease in value. Past performance is no guarantee of future results. Any of the charts and graphs included in this blog are not recommendations for the purchase and sale of any security.