Retirement Roadmap

Delay Retirement or Retire Now? Here’s How to Decide

• Mark Fricks • Season 3 • Episode 32

Share episode

Retirement isn’t one-size-fits-all—and delaying retirement can be a smart move for some people and a mistake for others.

In this episode of Retirement Roadmap with Master Plan Retirement Consultants, Evan and retirement planner Mark Fricks walk through the most common reasons people work longer (financial security, purpose, flexibility) and the key tradeoffs you need to evaluate before you choose a retirement date.

We cover:

  • Why more people are delaying retirement (and even “unretiring”)
  • The real retirement math: savings, timeline, and income planning (not a “magic number”)
  • Social Security timing: why the “wait till 70” answer isn’t automatic anymore
  • Healthcare timing (especially retiring before Medicare at 65)
  • Market timing risk when you’re close to retirement
  • Emotional readiness: purpose, routine, and what you’ll actually do day-to-day
  • Family & social life after work (what changes when your schedule changes)

Before you decide, ask yourself these 3 questions:

  1. Why am I retiring? (new chapter or escaping something?)
  2. What will I do every day? (purpose prevents boredom and aimlessness)
  3. Can I live on my budget? (run a realistic retirement budget)

Send us a text

Visit masterplanretire.com to access our retirement checklists, podcasts, and schedule a complimentary consultation.
Call 770-980-9262 to speak directly with someone about your retirement planning needs.

https://masterplanretire.com/

Catch all episodes of our podcast at https://www.masterplanyourretirement.com/resources/episodes

Listen to Mark Fricks on Saturdays at 12:00 p.m. on XTRA 106.3 FM WFOM.
Sign up for one of our upcoming events at https://www.masterplanyourretirement.com/events

Purchase Mark’s book, The Road Less Traveled: Turning Your Retirement Worries Into an Excursion of a Lifetime, on Amazon: https://a.co/d/4fx94Al

Advisory services offered through MasterPlan Retirement Consultants, Inc., a Registered Investment Advisor in the state of Georgia. Insurance, tax and commodities services offered through Fricks and Associates, Inc. dba MasterPlan Retirement Consultants. The aforementioned are affiliated companies.

SPEAKER_00:

All matters discussed during this goal are income. There is present everyone from reliable sources, and no representations can be made as to its doctors. All I think of information should be discussed in detail with our qualified representatives prior to implementation. Advisory services offered by Master Plan Retirement Consultants, a registered investment advisor in the state of Georgia. Mark Fricks and Master Plan Retirement Consultants are not affiliated with or endorsed by the Social Security Administration or any other government agency.

SPEAKER_02:

Some pensions get frozen, right? So it doesn't help to to go further. We all know about the Social Security decisions, which I'm sure we'll talk about today as well. But there's, you know, there's more math to it than, you know, ten years ago I was always about wait till 70, wait till 70. But the more I read, and I hope we we'll get into that a little bit today, that, you know, what is the current value of money versus the value of money in three, four, and five years? 100%. It's just it's it's just so many things to think about. We have so many discussions with clients. It really makes it interesting. It really does, you know, different avenues. So uh let's explore that today.

SPEAKER_01:

Yeah, absolutely. Delaying retirement or even part going partially into retirement is becoming more common. But delaying retirement is increasingly common. Many people over 50 are choosing to work longer, like you said, to improve their savings, uh, maybe increase that pension or social security amount, stay active, keep keeps people something to do, um, but also to adjust to modern financial realities. Economically, um uncertainty in that in that uh area can cause people to stick it out a little longer just to make sure that they uh feel extra secure in their retirement.

SPEAKER_02:

Well, especially when they start thinking about uh again, uh we have some clients that come in and say, Oh yeah, I'm I'm not gonna live past 75. And I then I start having that discussion with them and say, well, think about this, think about that, think about what's happening in in medicine and health and and DNA and and all of the things that are going on, what we could not do 10 and 20 years ago versus today. Um, is the quality of life still gonna be there? That's another question, and that could come into play from a standpoint of money. Maybe you live till 90, but those last five years, you're needing a lot of care. So there's that money as well. So it it it's a different picture. You can't look at your parents and your grandparents as what they did. You've got to look at today's reality. Just like 20 years from now it's gonna be different for those folks as well.

SPEAKER_01:

Yeah, absolutely. So surveys show that nearly 25 percent of pre-retirees plan to delay retirement, and about one-third of current retirees are considering unretiring, and we've seen that before. You retire, you do your bucket list for a couple years, and you're eventually you're just like, I'm kinda bored. I I want to get back out there. And we'll talk about some of the reasons for that as well. Um across generations, people expect to retire around age 70, even though they'd like to retire closer to 64. That six-year gap is driven by longer lifespans, higher costs, economic uncertainty. The higher lifespan is a really interesting one because we discuss this all the time. People are living longer. Um we've discussed Social Security taking it too early, and then, you know, you living 30 years, you kind of locked in that lower amount for a really long time. My grandfather, your father, he took his early retirement and social security, and they're still puttering around in their 90s.

SPEAKER_02:

He's 93, 94 years old with that lower social security amount, right? So uh he was really burned out. There's a lot of reasons that went into that, and he didn't have a retirement uh consultant, right? A hundred percent. Thirty-something years ago, that was something a little bit less obvious uh need. But uh yeah, uh it again, how long we're gonna live, we don't know. We do examine our clients' family history, yeah. You know, their mom and dad, siblings, things like that, to get an idea and and also what kind of health they're in, yeah. And how do they take care of themselves? But that is a biggie uh that that we we don't know. But also, Evan, if you have a married couple, what's the chances of one of them living much longer? Right. Pretty, pretty good chance. Uh so do you want to make sure that loved one that you might leave behind is taken care of as well? Right. If they live to be 90 or 95. So it's it's a it's very interesting topic. Uh probably could spend a whole show on that.

SPEAKER_01:

Yeah, and motivations vary uh uh among individuals as well. About 33 percent delay retirement to maintain purpose. We'll talk a little bit about that. We've had a recent episode discussing purpose and retirement, how crucial it is. Uh 42% enjoy the challenge of work. I know we know plenty of people who just like to work. They have no reason to leave, they feel motivated by that. But um over half cite financial concerns um or the desire for more flexibility. So the first thing to decide whether or not you should uh or need to delay retirement, number one, do you know your numbers? Um, you know, the big broad savings discussion, you know, there's no single magic number uh for retirement readiness. Um it depends on the individual lifestyle, health, location, where you live. There's so many factors that go into what you need in retirement, what that actual income need is, and then the savings outside of that income need.

SPEAKER_02:

Yeah, we have so many clients that uh I wouldn't say so many, but maybe 20% of our clients, that's just kind of a guess, uh, have retired nicely on two, three, four hundred thousand dollars uh in in retirement savings. Now they might have an extra pension or or whatever may be going on. Maybe they don't, maybe it's just the fact that they're living on on less because they're used to living on less. Maybe they do work some part-time work as well. That's this magic number you keep hearing thrown about of you need a million dollars, that number's been around for 30 years. So where's the inflation aspect of that? It's really been funny. Um I still have clients coming in saying they've read that. Um and so I don't know if it's the same article that's been out there the whole time or what, but it's so silly to say that. And we've talked about this before, I know, but it's like you know, somebody coming up to me and said saying, you know, everybody should be on high blood pressure medicine.

SPEAKER_01:

Yeah.

SPEAKER_02:

Regardless. And that, you know, they were doing that with cholesterol medicine for a while. Yeah. Everybody should be on on a statin or whatever, and uh I just, you know, that's not true. You know, let's let's take a look at your situation. So uh again, it's it's um uh I think what we do that I really love is that we take what they have, we take all the other pieces of the picture, and we squeeze every bit of juice out of it we can. And what I mean by that is we make everything more efficient, every piece of that puzzle. And so if you can make every piece a little more efficient, suddenly you've made the entire picture twice as efficient if it's done correctly. So I just I love that being one of the things that we do.

SPEAKER_01:

Yeah, the magic number discussion is um such a waste of time. It's a waste of time. And it's for articles on websites and magazines and things like that. Because really, if you don't know, you're gonna want to look somewhere. They they want to give you something. But it it really it it should be any number that they throw up there, and it doesn't matter because your case is is different. Also, they're looking at this giant nest egg as a one account to just withdraw from. They're not looking at splitting it up or making it more efficient, like you said. How what how much do we need? What do we need to use to create that income? We still need growth on the other end. Um it's much more uh so many more moving pieces than just something black and white. So it's almost um a waste of time to even mention that. Yeah, it's just a waste of time. But um delaying is helpful once you have your numbers, and we do this for folks, you know, we'll run reports complimentary, um, how your income looks in retirement, uh, do some preliminary 10,000 foot view um projections and then stress test those. We've talked about that before in our initial consultations. We'll do that for you. Um and it but it is shocking what a big difference, even one year of delaying retirement if you're in a position where you need to, how much more savings that you can build up, and not only savings if you're able to maximize your savings, but also your delay you're reducing your retirement length by a year, so there's less need in the long run. Also, you're incre potentially increasing your social security depending on your age. That's gonna increase your income, which is gonna reduce your need from your retirement accounts and savings. There's so many moving pieces. Um we're just gonna end this episode now and just say schedule a complimentary consultation with us. No, I'm just kidding, you should do that. But um, yeah, working an extra year, you know what, Social Security benefits another 8% per year delayed beyond retirement age. Um a lot of people have that discussion too. Should I turn on Social Security and save that or get the guaranteed 8%? And we have this discussion a lot.

SPEAKER_02:

And and again, there's really no tried and true answer. You know, used to the answer was uh yes, you get a guaranteed eight percent increase every year you wait after full retirement age. So that's a guaranteed return. Yeah. Um but again, what is the value of money a year later and two years later and three years later? Um and if you truly don't need that money, now you are being taxed on it, so that's the negative part. But the positive part is if you don't need that money and can save it, um, you know, that's gonna compound interest. So that's another whole slant on that money. So again, you for you know, for a while, you and I are preaching a good bit. You know, if you can wait till 70, wait till 70, but we've kind of become more flexible on that. And it's also how the client feels. Right. Sometimes they're like, you know, I just don't want to take money out of my savings for three years to delay social security. I want to take it now. And I'm like, well, then you should. If you want to take it now, take it now. It's not a, you know, should I have open heart surgery or not a tried and true, and we've seen the test because every life is different. Um and then it also comes into play too, and we may get into this later as well, is the timing of the market of when you retire.

SPEAKER_01:

So that certainly put people off in 28 uh uh 2008 and 2009. Uh, there are a lot of people who decided to put off retirement.

SPEAKER_02:

Big time. So if you're you know if you're a year away and suddenly, you know, your 401k or thrift savings plan has has dropped 20, 30, 40 percent, that's a pretty good chance you're gonna rethink the timing on this. You know, and so that's something else that can come into place. That could be a last-minute extension, right? You could be six months retiring and all of a sudden you're like, you know, they just threw your retirement party, you walk out the door and you look at the market and go, Here's the gifts back. I'm gonna wait a while on this. So it is it is such a complex situation, but yet because of our methods and the and the different um, you know, we we use very simple diagrams, we use very simple uh spreadsheets that really illustrate this is the effects of these decisions, and so we make that decision easier for our clients. So it it may sound confusing coming across the airwaves coming through your podcast, but in reality we can narrow that down to look at the main points so that it doesn't look like a big uh field full of weeds. We can actually drill down and see the answers and the crop that we're trying to harvest in retirement. I'm not sure if that illustration makes any sense at all. But it's not even really good coming out. No, the worst.

SPEAKER_01:

But but uh yeah, it's it's uh it's such a complex situation. Yeah, uh so we definitely need your income plan. Some other areas to consider um what does your debt look like? Are you debt-free? Ideally, have your significant debts paid off. Mortgages can be case by case, especially if you have a good rate, but again, all of these um are case-by-case basis, and um none of them exist within a vacuum. Are your retirement assets positioned appropriately? Um, because when you're in your 30s, 40s, and even early 50s, depending on when you want to retire, um, how your assets are positioned are gonna be very different than once you actually retire. You've got a whole different phase. You're moving from accumulation to decumulation, yet you still see it need some of that growth. Um so you want to make sure you are not just willy-nilly holding on to the same mutual funds in your 401k you've had forever. You you need to make sure that um you're much more intentional about those assets.

SPEAKER_02:

Yeah, we used to use an illustration, it was a mountain, and and and the climb up the mountain was climbing to the retirement flag. And basically the decisions you make on the climb up are relatively simple. You know, um open a 401k, contribute as much as you can. Should you need some short-term and long-term disability insurance and some life insurance? That's most of it. Yeah. Okay. Um, but you reach that retirement flag and the and the trip down, uh, just like when you look at mountain climbing, most accidents occur on the way down. Yeah. And so you're coming down and you've got, I can uh I can sit here and just take up a lot of airtime and name 12 to 15 things that need to be decided upon on at retirement and beyond. And so it it just just m uh like you said, it's just a it's different looking accounts, different look uh looking purposes. It's not, again, we've said this before, it's not the size of the retirement Nestec, it's how much income can be produced from it.

SPEAKER_01:

Um is it easily accessible? Sometimes people don't realize their assets might be more locked up than they realize. Maybe you have to have surrender charges, things like that. Maybe they're under 59 and a half. If they're trying to retire early, you've got to consider that. How are you going to get to your retirement assets when you need them? There's a so many different things.

SPEAKER_02:

And so many things that you that many people don't discover until they've made the mistake. Right. And then you and most of the time it's not reversible. And so that's why again, and you know, I it sometimes I wonder why we don't have a line going out the door of people wanting to advise, whether it be just a couple of meetings to to get steerage in the right direction, or whether it be an entire plan laid out, sure. The peace of mind, and that's what, as you know, every client, when they're about the probably at the third or fourth meeting, they say that's what you guys have given us, is all this other stuff, it kind of comes together to give us peace of mind in retirement. That's right. And we don't have to worry, these decisions have already been made. If my spouse passes away, we have a plan. If uh if the market crashes, we have a plan because we've got protected accounts. Uh if this whatever happens, we've got a plan for it, so we don't get surprised. It's it's a um uh it's kind of a military um way of looking at it. You know, in the military they always have another plan if this one fails, and then they have three more behind that. And it's kind of the same thing. And and I learned that very early uh when we started this firm, even before that. But within the first couple of years, we had our first client pass away, and the spouse calls me and says, you know, um I'll I'll use a made-up name. Don passed away last night. I don't know what to do. And I said, Financially, don't do anything. I said, You go grieve, you take care of family, you take care of yourself. We'll meet in a few weeks, but we've already got a plan. It's just a matter of getting together and and changing that course. It's there. And and I think that just brought a wave of relief to her in the fact that because he was un he he passed away unexpectedly. And so that taught me a very early lesson on being prepared for whatever could happen.

SPEAKER_01:

Absolutely. Um I do all of that to say, you know, we can't give that magic number of what you individually need for retirement. But that is pretty much the beginning of every meeting we do, whether with a client or prospect, when they get on the on the roll with us. Those are those complimentary consultations, folks. You can go to our website, masterplanretire.com. Uh there's a button that goes directly to our calendar. You find a time that works best for you. Um Masterplanretire.com. We'll actually look at your numbers, your real numbers, your actual unique circumstance, and say, okay, what happens when we retire at this at this point or this point? Let's stress test that, see our strengths and weaknesses. Um and that's all complimentary. Masterplanretire.com or give us a call at the office 770-980-9262. Um outside of the um those financial considerations, another huge considerations, uh consideration, excuse me, is health care. So um a couple of broad pictures, retiring before age 65 can create a costly coverage gap um before Medicare eligibility. You know, maybe one of you, or maybe you you're on your spouse's plan and they're still working. Like there's a lot of different circumstances, but in general, before 65, you've got a little bit more consideration with healthcare. Cobra, uh, marketplace even, like these things are expensive. And they're ever changing. And they're always changing. Waiting a year or two to 65 to Medicare could be a good move for that. Um and then there's also, of course, long-term care considerations. This isn't gonna be a um an episode too much into that. Um that's a little bit more of a long-term preparation, but you need to at least have an idea of what that's gonna look like because you never know what once you walk away from one retire uh insurance health plan. Um there's a lot to consider in that sense.

SPEAKER_02:

Yeah, uh there's statistics statistics out there that um uh you know that I don't I don't have memorized, but like if a couple reaches age 65, there's like a 75% chance one will need some type of a long-term care um uh you know situation, whether it be home health, whether it be a sister living memory care, whatever. So there's a pretty good chance that there's gonna be some care needed. And and we have a uh some occasional clients that that will say to us, Well, we as a family, we take care of our own. And and uh that's a great that's a great sentiment, that's a great um uh you know agreement to have, hey, we'll take care of our own. But do you look at real life? Clients we talk to that have been through long-term care situations, including us, Evan, uh, with our family, uh, we see that it's not as simple as we'll keep dad at home. There's a whole lot more to it than that. Um first of all, do you want to burden the kids that already have kids with trying to fill in with some you know some home health care or or making sure dad's taken care of? Um then there's also the spouse. If there is a spouse left, it can subtract years to their life too. There are statistics that show that um their lives are shortened, their stress level is higher. Um and sometimes you just can't take care of my home. So don't don't don't d fool yourself, I guess, uh, you know, into thinking, hey, we'll keep dad, and maybe it can happen, but I would not bet on it.

SPEAKER_01:

Yeah, 100%. So uh another huge consideration is purpose, and we just recently had an episode uh available on YouTube or wherever you stream your podcasts on the importance of uh purpose-filled retirement. Um emotional readiness we know matters just as much as finances. Um basically fulfillment and purpose, if you f you need to feel a sense of accomplishment. Um and so to determine if you're ready for your retirement, does your work provide that for you? Are you gonna be able to replace that sense of accomplishment and purpose? Um Do you have uh clear plans on how to spend your time in retirement? Um, from hob hobbies to travel uh to volunteering, it's it's really important that when you're leaving one phase, that you're not just all of a sudden isolating yourself. Um how's your job satisfaction right now? I mean, does work feel draining? Um is it unfulfilling? Do you dread going in? I have a client uh retired about a year ago um just because he just could not drive to Atlanta anymore. The traffic it was just stressing him and causing so much anxiety. Um are you burnt out? Are you experiencing significant stress? Or health issues related to work. So yeah, what's your motivation? Do you have that purpose? We're so career driven. We find our identity oftentimes. The first thing when we uh are meet new people, hey, what do you do? You know, that's how we identify ourselves and and um and I would argue mostly in an unhealthy way we tie our identity to that.

SPEAKER_02:

Um it also could be the flip side too. We have some clients that they really enjoy the type of work they do, but maybe their boss has changed or the environment has changed, or just the nine to five daily grind. So a little a lot of them will step back into more of a consulting. Sometimes their company will be flexible. Hey, you know, give us three days a week, or or or we'll let you do, you know, this is a project we have coming up. Things like that. And I think that's a great transition if you love the type of work you do. You know, that's kind of, you know, our clients will ask me, say, you know, Mark, you're getting on up in years. I'm really not that old. Uh and I'll, you know, they'll say, When are you retiring? And I say, I don't have plans to retire. My role may change um more into the things I really love doing. I love my entire job, but there are some things I love more than others, you know. And and so maybe we I go more toward that as we bring in uh new advisors that take on other new clients as well. Um so I see that, I see that happening as well, and more freedom and being able to take a little bit more time off uh to avoid burnout, you know, but also the things I love to do. So it's it it it it it's just a so many different ways it could go with that.

SPEAKER_01:

So finally, um the last thing I would just want to say is family and community. Do you have a social circle outside of your work? Um a lot of times, you know, we're working the majority of our time is spent at work around these folks at our office or wherever we are. Um, whether we like it or not, that might be our social circle. So making sure that your support system, your partner, uh is ready or you have strong social connections outside of work. I mean, your loved ones really factor into your retirement decision as much as anything else. You you likely will be spending more time, a lot more time with your family. Uh so it's important to make sure your expectations are aligned. Um you want you don't want to retire and expect, oh well, we're gonna be doing all this stuff together, and then maybe your spouse is like, well, I'm still have my schedule that I've got to deal with.

SPEAKER_02:

Or maybe you retire early enough that your spouse is still working and all your friends are still working. Yeah. And how you're like, what am I gonna do? I read the other day uh the three circles of retirement are uh health, wealth, and social. And so I think if you concentrate on those three circles, and I would add either a fourth or make it part of social, would be spiritual. Um whatever that means to you know to those that are listening as well, uh make that part of social, I guess. But again, do you have the wealth to retire? Um, do you want to are you able to maintain that wealth in retirement? Are you maintain able to maintain your health in retirement? And finally creating, like you said, that social circle, whatever it may be, whether it be uh church, whether it be the you know, a couple of local clubs, volunteering, things of that nature, you know, it just would just so important to have a cause, whatever type of cause it may be. Uh and and we see clients struggle with this. And we talk about it a lot.

SPEAKER_01:

So in closing, I I want to leave uh the listeners and viewers with three questions to ask yourself. One, why am I retiring? Is it for a new chapter or to escape something? It could be both of those things. Why am I retiring? Number two, what will I do every day? Having a plan prevents boredom, feelings of aimlessness, maintaining your purpose. And then three, can I live on my budget? Run a realistic retirement budget. And that is where we come in and help our clients develop that retirement plan. Again, you can go to masterplanretired.com, schedule your complimentary consultation. Mark, any remarks in closing?

SPEAKER_02:

No, I I think what those three questions actually matched up to Wealth's Health and Social. They really did. It was kind of funny, we didn't plan that. But I would just say again, uh, you know, uh just make sure you have a plan and you've worked with somebody that knows what they're doing. But uh until we see each other again, we're glad you joined us. But remember, plan well and prosper. Take care, everybody.

SPEAKER_01:

If our love was found, it hasn't been returned. It just keeps spending all my dollars on some other born, spirit.