The Triton

Uncategorized

Should I Retire Completely?

ADVERTISEMENT

Recently, I had a conversation with a gentleman that was just getting started in his retirement years. He wanted retirement, he said, but he didn’t want to retire. He was tired of a rigid daily routine and was looking forward to a more flexible and relaxed day.



To him, retirement did not mean to stop working, as his father had done.



For this gentleman, retirement meant doing something different. His main concern was whether he had planned enough for inflation, the increasing cost of healthcare and other expenses. Like many others eligible for retirement, he was opting to continue to work because of unknown expenses and concerns over finances.



By sitting down and charting out a course for his retirement, we determined that he could, in fact, retire immediately, but he would live on a tight budget. So instead we discussed a slow transition into retirement, giving him a chance to get used to retiring and also making his retirement funds last longer. He agreed to not take on as many jobs and to be a little more picky of the jobs he did take, giving him time to take long weekend trips and just enjoy more free time without getting bored.



The result is that he is not as stressed about his finances now that he has a plan and knows that he can start taking a lot more time off without impacting his future finances.



I had a similar conversation with a couple in their 50s who faced retirement around the corner. They are a husband-and-wife team, always traveling. After looking over their portfolio, we mapped out a plan to transition them into retirement. They liked the idea of working hard for the next five years and socking as much away as possible to “retire” early.


Of course, in retirement, they would continue to do deliveries and work with less demanding vessels that didn’t require as much travel. While they wouldn’t be putting much new money away, that extra time would give the investments they had begun time to compound in value. (One way to calculate this is to visit www.ultimatecalculators.com/continuous_compounding_calculator.html.)



This couple had already accumulated about $150,000. They committed to investing an additional $50,000 a year for five years. By their mid 50s, they would have a portfolio of about $430,000. This would be left alone to compound at 10 percent over 10 years with no additional investment contribution. In other words, they would live on just what they make working part time.



If they can do it, they will have a portfolio of $1.17 million upon retirement. That would give them $80,000-$90,000 of income a year without touching the principle.



As our life expectancy continues to grow, our definition of what to do in our retirement years may change. Listening to the chatter in Washington, D.C., it is clear that the expectation of social security as a major component of retirement income is becoming questionable.



Many of my clients had no real idea what they would do for retirement. However, they all understood that not having enough money was a limiting factor.



If you do not have a written plan for your retirement income and just jump on “the best investment of the day” with your investment dollars, then you will most likely not have an enjoyable retirement. Funding retirement requires getting help from a professional who is willing to take the time to understand your objectives. In most cases, your plan requires frequent changes as investments change over time and preservation of existing money changes as you get closer to retirement years.



Time for me to step up on my standard soapbox: If you don’t have a plan for retirement, get one. We all make plans to accomplish what we want but it is truly amazing the number of people who just ignore the need for a retirement plan. Consider that it is the longest and most expensive trip you will ever take.  

If you are a yacht captain and the owner asks you to plan a one-year trip with a monthly budget to cover all costs — and a bonus to you at the end if you make it happen — how much planning will you do? Don’t make planning vacations more important than planning your retirement years.



Information in this column is not intended to be specific advice for anyone. You should use the information to help you work with a professional regarding your specific financial goals.

 

Capt. Mark A. Cline is a chartered senior financial planner. Contact him at +1 954-764-2929 or through www.clinefinancial.net. Comments on this column are welcome at editorial@the-triton.com.

Related Articles

Lucie Fox joins NJ in crew services

Lucie Fox joins NJ in crew services

Northrop & Johnson has hired Lucie Fox as a crew services associate. According to a company statement, Fox is originally from the U.K. and worked as an executive assistant before pursuing a …

Inmarsat, ITC Global team up to expand services

Inmarsat, ITC Global team up to expand services

Inmarsat and ITC Global have announced a five-year strategic partnership that will enable the organizations to combine their services to offer broadband connectivity and connectivity solutions to …

Cuba laws remain but yacht travel is easier

Cuba laws remain but yacht travel is easier

In January, the U.S. government made a major shift in policy regarding its trade with Cuba. After 54 years of strict trade embargo enforcement, the Treasury Department’s Office of Foreign Assets …

Sugar substitutes may shed calories but they add more to the mix

Sugar substitutes may shed calories but they add more to the mix

We are all born with a sweet tooth. Or more specifically, receptors on our taste buds designed to make us like the taste of sugar. The problem is, we eat too much of it. Americans consume nearly …

Stew Cues: Mistakes in carpet care drive owners crazy

Stew Cues: Mistakes in carpet care drive owners crazy

Stew Cues: by Alene Kennan The interior spaces of yachts are designed to be as comfortable as an owner’s or guest’s home. The furniture, textiles and materials chosen for the flooring define …

How did you get your start in yachting?

It takes all kinds of people to work in yachting, those who have saltwater in their veins, those who tripped over a line somewhere along the way, and those who fell in love (with boats and/or …

Comments