The story below is from our 2023 edition of Retire-VA. View the rest of the issue for free here!
There are a lot of right ways to do it, but waiting until the last minute is probably not among them.
The question is simple: “Is it ever too late to start financial planning for retirement?” The simple answer: “Depends on who you ask.”
Gretchen W. Beedle, financial advisor with the Conner Group in Vinton, states what is obvious to professionals, but not always obvious to the public. “While it is never too early to start planning for your retirement, the longer one waits to get started, the fewer options you will have as you approach that switch from working to true retirement.”
Andy Hudick of Fee Only Financial Planning in Roanoke breaks the question down even further: “Sooner is better but doing something now is better than nothing at all later.”
“There’s always hope,” says John Hall, President of Lynchburg Wealth Management. “If you feel hopeless, reach out to someone who’s been there or someone who may be more familiar with tools and strategies available to you.”
Retirement plans, of course, are all over the board. Consider these:
Serial entrepreneur Bonnie Cranmer says that “for me, planning was minimal, other than Social Security and continuing to sell vintage goods online. What shifted was a need for community.” Her friend, Tami Quesenberry, with whom Cranmer had a business 20 years ago, felt the same.
“Many who retire after having an active business and social network feel that loss. Tami retired after 15 years at Virginia Tech Veterinary Services and wanted to have a shared space for creative endeavors as an experienced landscape and floral designer. I wanted to share vintage goods and experiment with handcrafted paper designs.
“We also found a wealth of artists and crafters in the region who were excited to join us. The New River Vendors Village in Pembroke is on the way to becoming a destination for the creative and unique. I’m excited to be able to use my professional expertise to support the business, while still maintaining semi-retirement.”
Courtesy of Kathy Heberle
Kathy and Mark Heberle enjoying retirement.
Kathy and Mark Heberle of Roanoke took a more traditional course. “My husband and I downsized from a large home to a smaller condo before he retired. We love it and now we are stockpiling our funds. I retired seven years ago when we moved to Roanoke to live near our daughter and grandchildren. My husband, 68, still works because he enjoys it.
“We decided to downsize last year after Mark had a cancer diagnosis. We had a large home on a half-acre property which was way too big and way too much work. We simplified and got rid of about 70% of our stuff, including furniture, and we bought a smaller condo in Hollins.
“We both get Social Security, and my husband gets a pension, so his salary is just an additional bonus. We also got rid of our big mortgage, so our expenses went way down. Utilities in the condo are only a third of what they were.
“I’m actually running a Facebook group called DownsizingDesigns, because I had so many friends wanting to hear my story. I highly recommend downsizing for everyone, especially if you don’t have children at home anymore. The younger you do it, obviously, the more you can stash away. I wish we had started 10 years ago. We have really improved our lifestyle.”
Connie Tyree left corporate America end of 2020. At 56, she had a good severance package, but “really had no plan to retire or to leave corporate America, but after a year of COVID change,” she began looking around. The COVID slowdown helped me to refocus and remember why I was working to begin with. It was not to retire with some gold medallion; it was to enjoy the fruits of my labor with those I love.”
What she has found in her new work gives “me time out of the house, to contribute and to do things with my time that are enjoyable to me. My career had been financially wonderful but not personally rewarding toward the end of my term.” She has gone from corporate pro to a wellness instructor for Roanoke County, working when she chooses.
She also has a small business called Trusted Housesitter, pet sitting “in exchange for staying in the pet owners homes. It doesn’t drive up my income, so no taxes, and I spent six weeks in Florida [during the winter].” And there’s more: “I also have a commercial cleaning company still operating in Maryland that I started from the ground up in 2014.”
She says she is still looking for the perfect balance, but her quality of life compared to the salaried grind is no comparison. “I love my life. I can only imagine what I could have done if I had chosen to look at my numbers sooner and been more intentional with my time and money.”
Jennifer Grover of Blacksburg has gone from grand retirement plans to a job and situation she never dreamed of. “When the plan tanks, make new plans. I’m a newly-minted city bus driver and I have leased pastures and my barn to research a herd of retired racehorses with an NIH (National Institutes of Health) grant. How’s that for creative reforming of goals? It’s paying the mortgage.”
Jill Barr Loope, retired Roanoke County Economic Development Director, says, “Frankly it’s been a lifetime of planning with saving since I was 18 and in college working full time. By saving a little at a time, I am reasonably financially secure. Recently, I met with a financial advisor, then outlined a game plan. I am also grateful for 32 years of government service, which provided a good retirement plan. Finally, I bought a car, finished some home improvements and paid off some debts. All of which will better position me financially moving forward.”
It's Not Too Late; Here's Why
Professional financial planners are full of a wide range of suggestions for those hoping their golden years don’t become leaden years. Most agree, however, that the earlier the plan begins, the more likely it is to be successful.
“Like with most things in life, the earlier we start preparing the better prepared we are,” says John Hall of Lynchburg Wealth Management. “The old adage holds: the best day to start was yesterday. The second-best day is today. There are important planning considerations at every age up to and including the day you retire, and plenty of planning considerations during retirement, as well. If people finds themselves approaching retirement age without a financial plan in place, it’s time to make that happen.”
Eden Bowen, who co-wrote “35 Great Ideas” with financial planner Andrew Hudick of Roanoke, says, “When is it too late to plan for retirement? Tomorrow. Many people don’t think about their future or retirement. They kick the can down the road thinking that there will be time to figure that out later. Everyone can do something today, regardless of their age, to take care of their future selves.”
Gretchen W. Beedle, financial planner for the Conner Group in Vinton, offers some ideas. “For those getting started later, they may be limited by their potential Social Security benefits, any pension benefits they’ve earned, and the cash or investments they’ve been able to set aside. Lowering the required outflow by reducing debt, paying off a mortgage if you own your home and/or downsizing to a smaller or less expensive place to live will help retirees level the balance between what comes in and what must go out to support themselves.
“Often, we are in our highest income earning years in the 10-15 years before retirement. Taking advantage of this income by maximizing the tax qualified retirement accounts through work or with IRAs is important. It’s the main reason the IRS offers catch up contribution increases for people aged 50 and older and the IRS has been increasing the contribution limits on these retirement accounts to help people save more. For those who qualify to contribute to a Health Savings Account, there is an option for a catch-up contribution there as well. One should consider taking advantage of these opportunities.”
“Make the right choices when it comes to when to start taking a pension or file for Social Security. Many people are inclined to take these benefits as soon as they’re able. This can be a costly mistake,” suggests John N. Hall, President of Lynchburg Wealth Management.
“Instead, understand the benefits of delayed filing and come up with a plan that takes into consideration all possible income sources. Retirement age and Social Security filing age don’t have to be the same. Very often, it may make sense to wait to file for Social Security months or even years after separation from employment,” he says.
“There’s always hope. If you feel hopeless, reach out to someone who’s been there or someone who may be more familiar with tools and strategies available to you. Mark today on the calendar as the day you’re going to take actionable steps to better your situation.”
“The lower your cash outflow needs are, the less you need to comfortably live during retirement,” says Beedle. “And the longer you are willing and able to work, the fewer number of years you may need to support yourself in retirement.
“There isn’t a secret way to come into a windfall of cash and few are lucky enough to hit the lottery. Not saving enough for retirement will leave you scrambling to get by in old age. At the very least, you’ll need to work longer or make serious adjustments to your lifestyle to get by.
“Start by beefing up contributions to your work-sponsored retirement plan. After that, look into funding a traditional or Roth IRA to save even more. To help guide you with your retirement planning strategies, meet with a financial advisor to find out which steps you should take first.
“By making your retirement a priority, you can ensure you won’t outlive your money, or worse: wind up living in your kid’s basement.”
The story above is from our 2023 edition of Retire-VA. View the rest of the issue for free in our digital guide!