ST. CROIX INSIGHTS
Winning The Retirement Lottery
BY BRETT ANDERSON/ST.CROIX ADVISORS, LLC
Chances are you’ll hit the retirement lottery one day and it may well be your biggest payday ever. For most it comes in one of two forms – the sale proceeds of your business or that 401(k) you’ve been saving in for the last thirty years. Either way you are going from working for a paycheck to “mailbox money.” And I have to tell you nothing beats mailbox money because it just shows up for your retirement enjoyment.
When you cash in your “retirement lottery ticket” I have a few observations from many years of working with clients. When you go from working day in/day out and earning a paycheck every two weeks for the fruits of your labor, you’ve had one philosophy for your money. But after you retire, and often within three to six weeks and certainly within six months, you’ll develop a different philosophy towards money. And chances are you’ll become more conservative, desiring to spend less to preserve what you have.
During this time, I would recommend you do not to commit to any major purchases that you may regret. That’s probably easier said than done. You may want to travel purchase a larger retirement home or that cabin, or that well-deserved Porsche. What I see happening is clients will start to reevaluate priorities and even question will if they will have enough money to go the distance.
My recommendation – hold off on major purchases, relax into your new lifestyle, get used to mailbox money for six to twelve months before making major purchases. I suspect your values toward money will change during that time. And remember – you can finance college but not retirement.