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Retirement Planning

Retirement Planning & Retirement Management

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May 01, 2018

May 01, 2018

8:47 AM America/Chicago

Sometimes, it can feel like you’ve been getting ready for retirement for your entire life – and for some of us, this isn’t so far from the truth. However, as we get closer to retirement age, it becomes clear that saving for retirement and preparing for retirement are two different things.  

Retirement is a major life change. Most of us only do it once, and some of the decisions you make at retirement will affect your financial future – no do-overs. So when retirement moves from far-off goal to approaching reality, we have to shift our approach from retirement planning to retirement management.

What is Retirement Management?

When most people think retirement planning, they think saving. Whether it’s into a 401(k) or a long-term stock portfolio, much of preparing for retirement is gradually putting money in the right places. This is an essential part of making sure you have a reliable financial foundation when you leave the workforce — but it isn’t everything. Once we hit retirement age, we go from planners to managers.

At Baird, we see Retirement Management as the process of managing the transition from working to retirement, ensuring the decisions you make before and during retirement support a happy, healthy, and secure lifestyle.

Retirement management is a holistic process that looks at all parts of a retiree’s life, from financials to family needs to goals. People today are retired for an average of 18 years, so retirement management is also an ongoing process, where retirees or their advisors monitor and respond to the financial and life changes experienced throughout retirement.

How does this all look in action? We walk through a few pillars of the process.

Evaluate for Today

For those approaching retirement, it’s time to take a look at what those many years of planning have gotten you. Have your financials evaluated, including your qualified plan balances, stock portfolios, and projected social security receipts, among others. Consider your desired retirement date within this context. The transition into retirement is when many soon-to-be retirees make critical financial choices — you’ll need a clear picture of your own financial landscape to make those choices confidently.

For members of the oil and gas industry, decisions around pension plans, or whether to take lump sum payment, should be made at this point as well. The choices you make will rely heavily on your own finances and lifestyle and should be made carefully or with an advisor — they can have a real impact on your retirement plan.  

Don’t Forget Personal Goals

When you think about your retirement, how do you see yourself? If you’re like many Americans, you may have forgotten about yourself entirely. This isn’t surprising; it’s easy to get caught up in other big retirement questions, especially those surrounding money, taxes, and where you will live. But that’s not the whole story.

At its core, retirement is about your life, and managing it isn’t just about getting your accounts in order. Your own personal priorities play a similarly important role in your retirement, and your management plan should take them into account.

For individuals with children or living parents, the level of support they will need can significantly impact retirement plans. Imagine the next five years: Are you or a loved one at risk of health issues? Financial experts consistently rank medical expenses as a leading reason for disrupted or derailed retirement plans, so take some time to look at your risk and act accordingly. Purchasing long-term care insurance in your fifties, for instance, will be considerably cheaper than it would be in your seventies.

There is also the question of how you want to live your life. Frequent travelers, for instance, should budget accordingly, as should those of us considering a new (or 2nd) home. However you plan to spend your retirement, start laying the foundation for it now – many of these choices are best made early.

Make Planning Pay Off

The transition to retirement isn’t simple, but being proactive can make it easier. You’ve worked hard to prepare for your ‘golden years.’ Now you can finally put those years of planning into action. As time goes on, however, it’s important to keep tabs on important metrics and the performance of your accounts. Changes to your financial circumstances, major life changes, goals, or health can all have an impact on your retirement — but you and your financial advisor can take appropriate action when needed.

You may still have questions about retirement. Many of them aren’t so easy to answer, or may have a few different answers. In these moments, having a retirement expert by your side can make all the difference. Here at Baird Retirement Management, we have years of experience with retirement management for oil, gas and chemical professionals. It’s what we do. We’re ready to help you.


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