Retirement mind shifts: Be prepared so you can change your mind

CookPaul-150-x-150Paul Cook, AIF®, Vice President and Regional Director, Retirement Plan Services

If you’ve ever experienced a mind shift, you know what is meant by the saying, “there’s nothing as powerful as a change of mind.” This “ah ha” moment or mind shift is a change in focus and perception of a problem, situation, or potential solutions. Some mind shifts happen after experiencing a lightning-strike-like insight, while others evolve over time.

Recent research suggests that many individuals experience a mind shift as they approach retirement, resulting in a retirement earlier than planned and no transition period.

Retiring early  

In MassMutual’s study, Hopes, fears, and reality: What workers expect in retirement and what steps help them achieve the retirement they want, nearly half (45%) of the respondents said they retired earlier than planned.[1] In their younger years, the respondents said they believed they would work as long as possible. However, as time evolved, they changed their minds, experiencing a ‘work can retire you’ mind shift, leading them to retire early. Other factors also contributed to the number of retirees who retired earlier than planned. Changes in technology and changes at work were among the primary reasons people chose early retirement. A fair number (39%) of respondents retired early because they could afford to do so.

Even though they didn’t retire how and when they wanted, 79% of the survey respondents had no regrets about retiring when they did.

Scrapping the transition 

Many pre-retirees expect to gradually ease into retirement, or find other work once retired. A gradual transition, however, was not in the cards for the vast majority of those surveyed.  Seventy-one percent of the survey respondents stopped working all at once. They also found several barriers to re-entry into the workforce once retired, including an inability to keep pace with technology, and age discrimination.

A transitional or gradual approach appeals more when further from retirement. The closer the retirement date becomes, the more likely respondents were to say they would stop work all at once. When retirement is 11-15 years in the future, only 29% thought they would forgo a transition and retire “cold turkey.” When retirement was five to 10 years in the future, 35% said they would stop working all together at retirement, and when retirement was only five or fewer years in the future, over half (52%) said they would not continue working on any basis in retirement.

These survey results underscore the need to start saving for retirement early so you have a strong financial foundation in place well before your targeted retirement date. With a suitable financial backdrop, comes the financial freedom to abandon plans to “stick out” work until a certain target retirement date. Instead, you could follow through on your mind shifts, reimagine your retirement to focus on outcomes, and pursue new goals and opportunities.

Brinker Capital Retirement Plan Services works with advisors to offer plan sponsors the solutions to help participants reach their retirement goals. When plan sponsors appoint Brinker Capital as the ERISA 3(38) investment manager, this allows them to transfer fiduciary responsibility for the selection and management of their investments so they can focus on the best interests of their employees.  This fiduciary responsibility is something that Brinker Capital has acknowledged, in writing, since our founding in 1987. To learn more about Brinker Capital Retirement Plan Services, call us at 800.333.4573.

The views expressed are those of Brinker Capital and are not intended as investment advice or recommendation. For informational purposes only. Brinker Capital, Inc., a registered investment advisor.

[1] “Hopes, fears, and reality: What workers expect in retirement and what steps help them achieve the retirement they want” MassMutual 2016.