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Retire Eyes Wide Open: Season 2 Episode 2

REWO S2E2: Psychology of Retirement

We’re talking about the psychology of retirement with special guest Professor Kenneth Shultz, Ph.D. and author of the book Happy Retirement: The Psychology of Reinvention. You’ll also hear my top 10 tips for adjusting to your new retirement reality.

Feel free to contact Professor Kenneth Shultz, Ph.D. directly if you have any additional questions on his book:
(909) 537-5484
CSUSB Profile

To see other books Dr. Shultz has written or to purchase Happy Retirement: The Psychology of Reinvention, check out his Amazon page HERE.

To hear more episodes, CLICK HERE.


Welcome to Season 2 Episode 2 of Retire Eyes Wide Open. I'm Scot Landborg. Today we're talking about the psychology of retirement. We've talked a lot about the numbers on this show. But it's not just about the numbers, it's about living your best retirement life. How do you make the transition go smoothly? How do you get more fulfillment? How do you fill your time? How do you win at this phase of your life? That's what we're talking about today. Later in the show, we will have a special guest Dr. Ken Shultz, professor and author of the book, “Happy Retirement, the Psychology of Reinvention”. You'll also hear my Money Monologue. We'll talk about the week's news and the Money Rundown, you’ll hear the best thing I saw this week, and we'll take your questions.

This is Retire Eyes Wide Open!

Money Monologue:

The psychology of retirement, it warrants way more attention than you might think. We spend so much time and effort figuring out the numbers. How are we going to make it work? What's my income going to look like? What pension should I select? When should I take my Social Security? Will my investments last? What investments should I select? Stocks, bonds, annuities, that alone is a challenging undertaking for most people. But there's another significant challenge ahead. It's understanding that retirement is a transition. A big one. This can be especially true if you found a lot of satisfaction in the prestige of the job that you had. Maybe you were a CEO, Head of Marketing managing a bunch of people. What happens when that social standing goes away? And what do you do with all that time? What happens when your professional standing goes away? And what do you do with all that extra free time? Start thinking this through before you reach retirement and you'll be better prepared. The first few months, even the first year can be bliss. One wonderful vacation after the next. Not having that long commute anymore, or demanding boss. But after that reality hits, who am I now? How do I find value? How do I find meaning and purpose? What really makes me happy? Here my top 10 tips for adjusting for your new retirement reality.

  1. If you have an opportunity to slow down at work, take it. Retirement doesn't mean working full time and then nothing. For a lot of people, you may have an opportunity to transition over time. Maybe you're offered a part-time job with your current employer. Maybe you're offered to stay on as a contractor. If you have that opportunity, I encourage you to negotiate on your terms and look at taking it. The good news is if you don't like how it's working out, you can always resign from that position at that time. But often some of those opportunities that present themselves while you're still working there, might not present themselves a year or 2 or 3 years down the road. If you decide you want to engage on a part-time basis. So, if you have that opportunity, take it. It also provides you a great opportunity to transition to retirement. It allows you to really effectively slow down instead of going from 60 miles an hour to 0, you can go 30 miles an hour, work part-time, and learn how to fill your time. Learn how this transition period is going to be best situated for you as you move forward.
  2. Join the hiking group. Joining a hiking group is great for a number of reasons. One, you get out there, you get some exercise. Maybe you weren't able to exercise as much when you were working full time, so that's fantastic. But a hiking group is a great way for you to meet new people. If you can keep up with whoever's leading the pack, go ahead and do it. If you want to fall back and talk to someone else that's hiking, feel free. It's a fantastic way for you to meet a number of different people. Go from conversation to conversation and find a new group of people that might be embarking on the same adventure that you are: Retirement. They have all this extra time now, what are they going to do with it?
  3. Consider consulting or coaching. If you want to stay engaged in your profession, or your area of professional expertise, there are areas of coaching that you could participate in. Maybe you want to be paid as a consultant, maybe you want to be paid as a coach, maybe you want to volunteer as a coach for score and help the next generation of entrepreneurs. There's new technology today that might allow you to do just that and stay engaged with people on a professional level but do it on your terms from the comfortability of your own home.
  4. Join a wine club and attend their events. Wine clubs are a lot of fun. And now that you're retired or moving into retirement, you have more time to attend some of those special events. It's a great way to meet other people that also have the time to attend those events and have interests similar to you.
  5. Get a part-time job, just for fun. Sometimes it's not about the work. Maybe you want to drive one night a week for Uber just for the fun of it. Maybe you want to be a dog walker through, just because you enjoy getting outside and being active. Maybe you want to be a greeter at Walmart one day a week just for the fun of it, just to stay engaged, just to meet new people or maybe you want to help out extra around the holiday season in retail. There's a number of things that you can do and if the pressures off because you don't need the money, you don't need the income; it’s very interesting the things I see people do just for the enjoyment.
  6. Plan to take a local college class. Staying educated, staying informed, keeping your mind active are all super important things. And there's a lot of fantastic classes that are available at your local community college at the local university. Take a new language, take a class on American history or World War II. Any number of things might pique your interest and you might be surprised at what you find.
  7. Volunteer at your church, hospital, a political action group. It's amazing with what you can do with your time. Finding value can come in a number of different ways. Maybe it's helping out with the kids at your local church. Maybe it's volunteering, driving people around in a little cart at the local hospital or volunteering at the local Children's Hospital. Maybe it's being involved in one of a local, maybe it's being involved in a political party or political cause making phone calls going door to door, volunteering in some way you didn't have time before; Now you do.
  8. Plan a group cruise or tour. It's another great way to get engaged with other retirees, other people; other people that have time to do that type of travel. You can get friends involved, you could get family members involved, and often, the further out that you plan, the more you can get other people to join in with your trip. Some of the best deals when you travel our last minute, which is a retire you can do last minute or further out, plans further out. Now being a group leader can get you a lot of different discounts and can provide you some incentives and some rewards for participating. But you can also get some of the people that you care about engaged in some of your travel and part of the fun of it is just planning it. Going on a trip is a ton of fun but planning it and all the activity that goes around that, could be just as fun.
  9. Try a new hobby. Turn over a new leaf. Try something new. There's a whole list of hobbies that you could explore, things that you could do with your time that bring you value, that bring you enjoyment, bring you joy, and retirement that you might want to consider. Pottery, taking up archery, building model planes would work. The list goes on and on: Baking cake, decorating, taking a cooking class, taking hot yoga, there's all kinds of cool hobbies and different things that you could try out, take dancing classes, that are going to fill your time, get you out there, get you active, get you meeting new people, and really help you to transition through this next phase of your life.
  10. Plan a weekly activity with a loved one. Now you have the time to do it. Maybe you want to plan a Sunday night dinner with your kids and grandkids. Maybe you plan to go the movies every Tuesday night with your granddaughter or with your daughter. There are cool activities that you can plan with some of your loved ones and you have the time now to do it that you didn't have before. So, take advantage of it.

Those are my top 10 tips for adjusting to your new retirement reality. And that's my Money Monologue.

Money Rundown:

Our Money Rundown segment is where we cover the week's news. There are lots of media sources out there that are going to give you updated information about the economy in the markets. My job is to help summarize and synthesize, help pick out a few stories that are most important for you as a retiree or investor.

Story number #1

The SMP 500 recent new high on October 28, 2019, closing at 3039. What does that mean for you? Well, hopefully, good things. Hopefully, you've had good exposure to the US markets this year. We've continued this rally since 2009. The US markets up over 300% since 2009, and 2019 has been no exception. Now last year, we took a step back, SMP was down about 7%. But this year, the markets have rallied very strongly, SMP up over 20% on the years. Been an outstanding year, and hopefully, you've had good exposure to that. I run into a lot of clients today. A lot of potential clients, a lot of people that are asking questions, and they're wondering, “is the rally going to stop”? Well, the good news is we've really bounced up against this number in the SMP a few times going back over the past year and a half. And the markets had a really tough time breaking through. We might be poised for a breakthrough, finally. We've seen some resolution with some of the trade talks recently. The Fed has lowered rates a little bit. We have accommodative policy all across the globe, as global growth has been slowing. So, it couldn't be set up for a continuing of this economic expansion. Of course, you need to ask your own advisor; How much exposure are you going to have if the market rallies? How much of that upside can you expect to get? You also want to ask them if the market goes in the other direction. If the market tanks 10, 20, 30%. How much of that downside are you exposed to? Very important to be asking those tough questions to your advisor. Also, ask how much international you have exposed. International had a tougher go of it last year. It's been slower to recover this year. It's really been lagging for the past a decade. When the SMP is up over 300% International is up only 100%. So, ask how much international exposure you have and whether it really makes sense for where you are in your retirement life.

Story number #2

Hedge funds continue to have challenges. Jonathan Jacobson, head of Highfields Capital Management, is closing up shop and returning 12.1 billion in the fund that, according to the Wall Street Journal. What does that mean for you? Well, according to that report, hedge funds have outperformed from 1990 to 2009, but have lagged since 2010. They've lagged by 8.9 percentage points. Kind of a crazy divergence compared to the last 20 years before 2009. What's the takeaway for you as an investor? You know, I think a lot of investors that have had money 401Ks haven't had to worry about this kind of stuff. But once you reach retirement, you have a lot more investment choices. Do you want to look at hedge funds? Do you want to look at private equity? Do you want to look at venture capital? Do you want to look at rates? Do you want to look at illiquid securities? Do you want to look at alternative investments? You know, what other things are out there? And so, I think it's important to keep in mind that some of these more exotic instruments and more interesting investments, they may or may not be in your best interest. You really need to look at the risks, look at their return, look at the upside potential. Have they been lagging the market? Have they been outperforming? Ask the tough questions, because sometimes you’re making your plan more complicated by having some of these more exotic instruments in them. Sometimes your results are not any better. In fact, sometimes they can be worse. So, while an advisor may sell you on sophistication and complication and being a good thing. And sometimes it isn't. And that's our Money Rundown for the week.

The Best Thing I Saw This Week:

Netflix has an outstanding documentary on Bill Gates called, “Inside Bill's Brain”. I think it's especially relevant in light of our conversation about retirement psychology. Here you have a man, one of the richest in the world, one of the most successful in the world. What makes him tick? What gets him up every morning? What gives him purpose or joy? What does he love? I encourage you go watch it. It might inspire you on your own retirement journey. Not only did Bill Gates have a dramatic impact on computing, and our digital economy in an early age, but we learn a lot more about his personal life, how he tackles problems. We also learn about his next act after Microsoft. How he spends his time tackling some of the world's biggest challenges with this foundation. Here are some of my biggest takeaways from that documentary.

  1. Carve out space to think. Bill Gates at the peak of Microsoft, and even now when running his foundation, he'll go out on weekend retreats by himself. The smallest and the most Spartan of accommodations, with a fridge full of Diet Coke, and a bag full of books. He reads, and he thinks, and he writes. How important is that today? Once in a while, get away from it all. Peace and quiet. Maybe you and your partner go somewhere together. Maybe you need a day or two to yourself. Take the liberty to do it, especially in retirement as you're going through this transition. To understand the changes that you're going through, and what you want your future to look like. It might take some careful reflection.
  2. It's not always about traveling five stars. The minimalist accommodations of Bill Gates retreats are just the beginning. Some of the greatest joys that he's had in life. They're not always at the Ritz Carlton. They can be a canoe on a calm lake, a hike in the mountains, tent camping in the desert, or just a good book by the pool. Happiness is not always about the glitz and glamour. And I think in this documentary, you see the things that really bring Bill Gates value
  3. Value relationships and invest in them. Watching Bill's relationship with his wife is inspiring. The closeness, how they work together, how they trust each other, their love story. Maybe retirement is a new time for you to reconnect with your spouse or your partner. Do you have more time to be a better partner, to be more thoughtful, to connect more? Maybe it's a better connection to your family or to lost friends. When Gates reflects on his life, it's those personal connections that he values most. It's trips to the lake, it's camp, it's playing tennis with a friend.
  4. Spend time doing things worth doing. Your contribution doesn't need to stop. When that paycheck does. You can consult, you can coach, let your voice be heard on Twitter, create a blog, or a podcast write a book. My own grandmother never published anything before she retired. She spent decades after retirement, publishing, novels, fiction, her own life story for future generations. Another family friend volunteers at the local Children's Hospital and another is a volunteer coach at SCORE, the Entrepreneurs of Tomorrow. Now that you've retired, you have the time to do the things that you think will make a difference or the things that you find personal value in. Follow those instincts and know that the technology exists today to help you make it a reality in ways that were not available to your parents who came before you.
  5. Keep learning. I'm fascinated by Bill Gates and this desire to learn and grow, maybe have the time to read more in retirement or maybe you learn in other ways but continue to expand your horizon. It keeps your brain fresh, keeps your conversations dynamic. Who knows what you might uncover? Maybe a new passion.

And that's the Best Thing I Saw This Week.

Scot Strategy Segment:

We bring together industry leaders to talk about all things retirement.

Today, my guest is Dr. Kenneth Shultz, Professor of Psychology and Executive Board Member for the Center on Aging at California State University, San Bernardino. He's an author of over 50 peer-reviewed articles on aging and retirement issues, as well as the author of four books including Happy Retirement: The Psychology of Reinvention which we will be discussing here today. Just as a quick legal disclosure, our guest, Dr. Shultz is not affiliated with USA Financial Securities or Sterling Wealth Partners. And Dr. Shultz, thank you so much for joining us today.

[Shultz] Yeah, thanks for inviting me.

[Scot] Can you talk about why is the psychology of retirement so important for retirees and pre-retirees to consider?

[Shultz] That's a great question. Obviously, most people go into retirement, you know, worried about the financial aspect. Am I going to have enough money to make it 30, potentially 40 more years? And they're so focused on that, that they don't think about the psychological aspects of, you know, the subtitle of my book, the Psychology of Reinvention, you know, what am I going to have to do in terms of thinking about how I'm going to transition from whatever role I'm currently playing? That could even be, for example, a homemaker. A lot of people don't realize that homemakers have to retire as well. But in terms of most people, if they're in a full-time job, oftentimes, particularly if they're professional workers, they've been highly invested in that job, you know, for years. And now all of a sudden, they've kind of take on new roles, whether it's as a new role as a spouse or as a grandparent, or as a caregiver, or as a volunteer, for example. So, people just really need to think about what is it I want to not just retire from but what do I want to retire to? Ultimately, and that's, you know, behind it, yeah.

[Scot] This is a fantastic observation. I know in our experience was meeting with clients and potential clients and retirees, as you mentioned there, they're really concerned about the dollars and cents and the numbers and not quite enough attention is often spent at thinking about that adjustment period. Your book in the title mentions the psychology of reinvention. What do you mean by reinvention?

[Shultz] A lot of individuals who are approaching retirement are highly invested in their occupation and career. And they really have to rethink, what do I want my retirement to look like? And sometimes that's a minor reinvention. Other times it's a complete reinvention. If you were a CEO, Vice President of a company, and you're used to having a lot of employees and that type of issue. Now suddenly, it's just you and your spouse or you and your adult children, you know, they're probably not going to appreciate if you're demanding that they do X, Y or Z, like you used to be able to do with your employees. So, you really have to think about the reinvention part of it of, “I know, this is what I used to have. What do I want it to look like when I make that transition into retirement?”

[Scot] I think people when they're thinking about the retirement phase, the way that they got away from work, during their working years was going on vacation. So, a lot of people retirements going to be this big, long vacation. And that can be enjoyable for the first couple of weeks or a couple of months or even a year. But after that, it seems like reality sets in for a lot of retirees that that being happy and fulfilled and retirement often takes more than that.

[Shultz] Yeah, definitely. There's this honeymoon phase that people go through. They just embrace the fact that they don't have to get up in the morning. And they can sleep in, have an extra cup of coffee, go for a walk. But for a lot of people, that's good for the first few months or six months. But then after that, they're like, “Okay, now what? What's going to be next? I didn't have that many hobbies, you know, while I was working because I was always working so much. What am I going to do to fill all this extra time now that I know I don't have the job that I'm going to be going back to in a few weeks?” Yeah, one of the very first segments in the book is “Sunset vs. New Dawn”. And what you're describing is that unrealistically positive perspective. You want to be realistic that you want to be positive, but you want it to be a realistic positive. Not an unrealistically positive that this is going to solve all my problems once I retire. “I'm not going to have these health issues. I'm not going to have these relationship issues”. You still got to work on your relationship, still got to work in your health, still got to work on your lifestyle. It's just going to take a different form the whole reinvention component of it. Once you retire there.

[Scot] What are the top things that you think people can do before they retire to really be ready for the changes that they'll experience?

[Shultz] Yeah, I'd say one of the top things if you do have a significant other, that you talk with them about, you know, what they want to get out of it as well. If they're already retired or if they're thinking they're going to work a little bit longer. And you're not timing your retirement together, because obviously, often, you and your partner may not be the same age, or they may have started their career a little bit later. So, they're not quite ready to retire but you are. So really talk through it because it's not just an individual decision or individual outcome, it really is going to be a partnered outcome, and other people in your life that are going to be affected by it. So, could be a spouse, could be an adult child, could be grandchildren or even parents, obviously, with longevity, even when we're retiring, you know, a few decades ago, when someone retired, usually they're their parents were long past, but that's less than less the case these days. So, you have to keep that in mind as well.

[Scot] Good advice about before retirement. I think another piece of advice is to pick up this book. Pick up this book because there's a lot of insight about ways and strategies for you to start transitioning to this next, really important phase. The other thing I'd say is just, you know, keep talking about it as you mentioned. Not just your spouse and your family, your kids and your friends, and start thinking through what that next life is going to look like. And if you have an opportunity at work to be able to start transitioning, maybe you start instead of just going from working full time to not working at all. If you can wind down at all or have half a period, maybe go from five days a week to four days a week or three days a week, I think for a lot of people provides that opportunity to fill in that time, fill in that space, try out those different activities or hobbies or habits, instead of going from 60 miles an hour zero,

[Shultz] Exactly. Yeah, the Cal State system is great in that we have what's called the First Program, the Faculty Early Retirement Program. And whenever faculty, when they know that my expertise is in retirement, they asked me “Do you think I should do it?” I say, “Unconditionally yes, because you can sign up for up to five years and it is usually half time”. And I tell them, if after a year you decide, you know what, I'm ready to be done. You can just quit the program, or you can really use those five years to help you make that transition. Take those longer vacations, think about what volunteer activities or what other types of roles you want to take on. And you still got the comfort of what you've known for many faculty, you know, the last several decades. But then also, you can start to stretch yourself and reach out. We even had one faculty who moved away to Tucson, Arizona, but he had his in-laws still lived in Palm Desert area, which is where one of our regional campuses is, and they actually switched houses for six months. He came to the Palm Desert area, taught his classes, and his in-laws went out to Tucson, and then after he was done teaching they switch back he said it really helped him make that transition, which he wasn't quite ready to go full out, you know, retirement.

[Scot] And what about someone that's now in retirement? They didn't prepare. Now they miss work, they feel this big loss and really don't know what to do next. What steps can they start taking to live a better retirement life?

[Shultz] They really have to think about, you know, “What's going to give me a sense of purpose?” Whether that's volunteering in grandchild school, whether that's volunteering at a local food bank or senior center. Maybe getting involved with a professional group, if you are a longtime professional member. If you used to like going to museums or other things being a docent for something like that, so really thinking about and personalizing it for yourself. One thing that always sticks out to me is when somebody says, “This is the best job you could ever have; my job is the best job.” And I look at that, and I think, “Wow, I would never want that job.” But I think it's about fit. And for me, that would not be a good fit, but it's clear for that person, that's a really good fit. And I think there's an analogy with retirement. If your friend is saying, you know, “Oh, the best thing, you can do is volunteer at this agency!” And you try it out. You say, “Guess what, that's not for me”. You really have to think about, you know, “What did I enjoy doing outside of work, when I was still working full time? And what do I think is going to give me a sense of purpose and retirement?” And I think one of the best things you have to keep in mind or one of the key things you have to keep in mind is that you know, I'm going to need to be flexible. Things are going to come up, a spouse may end up having a long-term illness that I have to help deal with. Or it's, you know, all of a sudden, the adult child needs some extra assistance. I was talking to one of my colleagues, who is a professor at Fullerton College, and he was only 62. He wasn't quite ready to retire but his son was going off to college and he said, in Portland, Oregon, he said, “I want to be able to go up there anytime I can. So, I'm going to go ahead and retire.” And he didn't regret it. So, for him, that was what he felt like he really needed to do. So, I think if you're already in retirement, you're starting to struggle with it. You've gotten past the honeymoon phase, you really start to think, need to think, “What's going to give me purpose? What's going to help me or make me want to get out of bed every day in terms of something I'm really looking forward to?” And it doesn't have to be five days a week. It could be like you were saying is you're making the transition to retirement, something that you've got two days a week for three days a week that you're looking forward to doing.

[Scot] I think the good news is technology today, I think, can often make opportunities a little more accessible. Whether it's getting plugged in, as you mentioned, a volunteer activity, whether it's a hiking club, whether it's a group, whether it's working part-time job driving Uber on a Friday night just for fun. Or walk, or being a dog walker, there's a bunch of different ways to get engaged. Hopefully, people can take advantage of that, that technology to be able to be aware of and harvest those new opportunities.

[Shultz] Oh, definitely, yeah. My son is working on his language skills. So, he was looking for opportunities to practice just in Spanish online. And he was actually connected with several retirees who, several days a week, they just get online, and it's a chance to just practice your foreign language skills. And it was pretty clear based on what he was describing that these individuals were just looking to have engagement with somebody else. And they were able to do that, you know, via computer and technology.

[Scot] I think it's important to, for people that are going through that, to just to know that they're not alone. It's a very common thing for retirees. You know, I think the majority of retirees at some point, go through some transition phase of this whole retirement thing and how to deal with it not they're going to fill their time and it's very common to have an adjustment period.

[Shultz] Yeah. So, they really need to think about, “Okay, where am I at now? And what do I need to do to? If it is a phase where you're in a bit of a funk? How do I get out of this funk and, and move on to something that's going to give me purpose?”

[Scot] Is there a correlation between the activity level of happiness and retirement?

[Shultz] I really think it's up to the individual. I had a colleague who retired about a year and a half ago. It's funny, I gave him a copy of my book. And he thanked me later on. He said, “I read it, it's got some really good stuff in it.” But he said, “You know what? This thing that you know, you have to have this big plan in place, otherwise, you're not going to be happy in retirement.” He said, “I didn't need that. I just like the ability to get up and go work whenever I want and do whatever I want whenever I want.” I think he's still a bit in the honeymoon phase. But I think also he had the situation come up where he had his first grandchild and he's boasted many times about how he's been the go-to grandparent for being able to take care of his first grandchild there. So, I think he had a situation that he didn't anticipate where that was able to fill up a good portion of his time. I think if he hadn't had there, he may have had more of an adjustment to all of the free time he has in retirement.

[Scot] What do you think are the most important factors in someone having a happy retirement and going through that adjustment as seamless as possible?

[Shultz] The purpose component in terms of the reinvention, “What do I want? What do I want it to look like and making it purposeful?” So my friend who I just described, Steven, even though he didn't have this grand plan, it was purposeful in terms of “I just want to have this ability to be able to go out on my Harley and go for a ride up to Santa Barbara if I want to, you know for the afternoon for lunch or go see my new granddaughter.” So, having that ability. And then on the other side of it again, it's if you're with a partner, it's not going to be just your decision. So making sure that you're coordinating with your partner so that if your partner was a homemaker for years and you used to not having you at home and now you're home all the time, how are you both you and your partner going to make that adjustment?

[Scot] Dr. Shultz, in our conversation before we started recording, you mentioned an example in Japan of a common issue of marital challenges that are brought a bond upon by retirement. Can you talk through that example a little bit and how it might apply to people listening today?

[Shultz] Yeah, I think for anybody who's been highly engrossed in their career, where they've put in well over 40 hours a week, haven't maybe dedicated as much time to family and spouses they'd like to. I think those are the individuals that usually have the hardest adjustment. Yeah, the film I was talking about, and I apologize, I can't remember the exact name of it. But it was focusing more on the spouses, the women typically have these Japanese executives, who really didn't know their spouses very well. And when they retired, I mean, they literally felt like it was a stranger now living with them. And they were having all kinds of deep psychological reactions to this. Hopefully, that's not the case for most individuals who are listening to this podcast. But definitely, if they've been one of those individuals who's been highly engrossed in their career, they're going to need to probably do a little extra work to help make that transition and reinvent themselves. So, I think “phased retirement” that you mentioned earlier becomes even more critical for them. So, it's not this cold turkey, one day they're working 60+ hours a week and the next, they have nothing to go to.

[Scot] Do you think people that are retiring today are people more likely to be consulting on the side in retirement or working part-time for taking advantage of some of these opportunities that are out there? Is that something you're seeing more of or less of?

[Shultz] Yeah, I think definitely for professionals, they have that opportunity. You mentioned technology earlier. Technology makes it that much easier for them to be able to do that, where they in the past, might have thought, “Do I want to get on a plane and travel 100+ days a year to clients vs. now they can, you know, have a quarter of that in terms of the travel requirements, and do a lot of the other stuff via technology, you know, zoom meetings or other types of technology to connect with clients and still serve them well. Feel like they're connected, but then still not have to be there 40, 60 hours a week doing it. So, I think for a certain segment where that, you know, the highly educated in particular, who are used to doing this type of stuff, that it's probably an easier transition for them to be able to do that. Obviously, if you work in a manufacturing plant a little bit harder to be able to do that in retirement, except maybe, you know, on a reduced basis on a phased retirement type basis.

[Scot] I run into challenges with people that work in high profile jobs, where they're either a CEO or in a management position. Someone that gets a lot of fulfillment in the role and the position that they're in, in society, and then to go from having that job to not having a job at all. How does a person like that transition? That really values that social status.

[Shultz] That's a really good question. And I think those are the individuals that are most likely to struggle the most for the Psychology part of it and because they probably deal with finances on a regular basis. They've thought through the finance part of it, you know, thoroughly and they know that they're going to have more than enough money to retire on. But what they haven't done is, they haven't done the psychological part of it, to really think about, “What is it I want my retirement to look like? So again, it's back to either talking with a spouse or significant other or potentially a, you know, a counselor a career coach. I think there are more and more career coaches who are coming on board with not only “How do I help people advance in their career?” But, “How do I help them transition out of their career as well?” I know some companies offer outplacement when people are let go, but they I think they also need to help with the transition to retirement as well especially for these high placed executives who they may want to come back and serve in a consultant role as well.

[Scot] And I've seen I think the technologies mentioned before, is I've seen that really help provide a lot of opportunities in the past 5 to 10 years because now you can be, you know, if you were that type of executive, maybe you want to be a coach for people in that same profession or you want to be a consultant. You want to take those skills and you were Director of Marketing at a fortune 500. But now you want to help be Director of Marketing at a winery, or help provide marketing, consulting or coaching. So it seems that because of the technology and LinkedIn and other sources, there are ways for you to connect with people all over the world, where you can take your niche or take your next act and find a way to get some value out of that in this next phase.

[Shultz] Yes, definitely. I definitely have seen some of the research on the uptake in older entrepreneurs. We often think of entrepreneurs as, you know, being these young new MBAs trying stuff out. But the biggest growth in startups is actually older individuals who are making this transition saying, “I've been doing a job that I haven't really liked for a couple of decades, maybe now and I want to try something else. I do have the financial wherewithal to be able to transition out of that. I want to try something else.” So, you see them being able to do it. And as you mentioned, it's a lot easier these days with the technology and the ability to connect with others.

Thank you, Dr. Shultz, for joining us. You can grab his book, Happy Retirement: The Psychology of Reinvention, at Amazon, or online. Also go to our website: for a link to his contact information. Thanks again for joining us.

Listener Questions:

[Scot] If you want some of your questions answered during the show, go to our website, Click on “Ask a Question”. We'll do our best to get your question answered during the show. Joining us today with some of those questions is Lindsay Aguilar, Client Services Associate at Sterling Wealth Partners. Hi, Lindsay.

[Lindsay] Hi, Scot. Thank you for having me back. For our listeners, if you want your questions answered during the show, go to our website, and click on “Ask a Question”. Our first question is from Carol in Huntington Beach. “Hi, Scott. I'm divorced and 58 and really want to retire. Just not sure if I can. I have 500,000 of 401k investments. My home is worth 1 million, but I owe 500,000. I have no pension and my social security at 62 is about $2000 per month. Am I going to have enough?

[Scot] Carol, thank you so much for the question. I think the biggest thing you need to be considering and thinking about is your housing expense, that mortgage of $500,000. You got some nice equity there, but you also have a very big mortgage. So, if you want to retire soon, you're going to have to think about what you can do about that mortgage. Now a lot of people in your situation will downsize. In retirement, you don't have to live as close to where you worked. So, if you're in Huntington Beach, maybe you still want to be in a beach community. Consider Carlsbad, consider Oceanside, a little further away, but a little more affordable. Look at over 55 communities. Those can be significantly discounted versus regular homes. What about Temecula? Wine country? What about Fallbrook moving more in that area where you can maybe buy a place for $500,000 all cash-free and clear. You could also consider moving out of state. That might not only save you on housing but could save you on other taxes as well. So, explore that. The biggest thing that I see with people in your situation, Carol, is dealing with that housing expense. And if you can deal with that, you know, maybe you want to move to Arizona. Maybe you want to move to Mexico and get a view of the beach. Wherever you want to live, I think the important thing is to think about your retirement lifestyle. What do you want to do in retirement? Do you want to join all the wine clubs in Temecula? Do you want to live close to the beach? Do you want to live in Mexico and have a party every day? What is the retirement lifestyle that you want? Because with $500,000 of equity, that's going to give you a lot and allow you a lot of opportunities to live where you want to live. And if you can buy a place where you don't have very high housing expenses because of that equity. There's a lot you can do with $2,000 a month with Social Security and your investments. By the way, your investments if they kick out 4% a year, that's another $20,000 a year from those investments. So, $20,000 a year from that plus $24,000 a year from your Social Security plus you probably tax at a very low rate. Those things combined with no housing expense, you can have a fantastic retirement and you got to figure out how you're going to bridge the gap from 58 to 62. You got a little bit of a window there before you can turn on your Social Security. You have to think through; Are you going to be able to withdraw and not raid your investments too much where you'll have enough? You have a little bit of a gap there between 58 and 62 that you didn't even think about. Do you need to plan through? I'd encourage you, go to our website, and click on “Schedule a Meeting”. I'd be happy to talk to you more 1-on-1 about your own individual situation. I also would encourage you on our website,, I'd also encourage you to take our REWO Test (Retire Eyes Wide Open Test), it's going to ask you a series of questions and let you know if you really are retiring with your eyes wide open and if you're ready for retirement. Hopefully, that was helpful, Carol.

[Lindsay] Our next question is from Charles in Fullerton. “I retired this year. I was a pediatrician and I loved my work. Now I'm struggling to find the same level of satisfaction I found in my work. I love traveling but I miss my work. Any suggestions?”

[Scot] Well, Charles, thank you so much for the question. I think that's really what this whole episode has been about today. How do you find fulfillment in work? How do you find fulfillment in things outside of work? So, you know, a couple of things I'd say consider volunteering; Volunteering in your area of expertise. Consider finding a group you could work with part-time to still have some of that engagement. I knew a pediatrician that transitioned from their practice. And they went from working five days a week down to two days a week down to one day a week. So, there are organizations that would let you do just that. That may give you some of that fulfillment, some of that engagement that you need. And then again, just look at different areas where you can find some of that personal and professional fulfillment. Maybe it's coaching. Maybe it's coaching young doctors, maybe it's career coaching. There's a whole bunch of different areas that you could look to explore. But good luck as you go on this journey.

[Lindsay] Our final question is from Angela in El Segundo. “How does someone know how much their investments can produce in retirement? And know if they're going to run out? My investments have grown nicely. But how much can I safely take out? I want to make sure I have enough in retirement.”

[Scot] Angela, thank you so much for the question. I think for the most part, if you are 55+, a lot of financial advisors would encourage you that you should be able to withdraw about 4% a year from your investments, and not run out of money during your lifetime. Now, that's based on you having a good mix of investments like 60% equities, 40% bonds, or maybe 70-30. T. Rowe Price actually came out with a study on this and if you want me to send you a copy, I'd be happy to do it. Just go to our website, and click on “Send a Question”. We'll make sure to follow up with you. But if you want that report, reach out to us. What it shows you is different withdrawal rates. What's the probability that you will run out of money? And if you pull 4%, you've got over a 90% chance that you won't run out. If you reduce that to 3%, you're in the high 90% range. Now, of course, if you're just investing in CDs or a savings account, or if you've got money under the mattress, then you got to be concerned that you're going to run out of money and that your money's not going to keep up with inflation. But if you're invested appropriately, if you've got a good mix of stocks and bonds, if you got a good person helping you manage those investments, if you have a 3, 4, or 5% withdrawal rate, you should have a pretty good likelihood of success of not running out of money. Now, the higher that withdrawal rate, the less likely you are of having money left at the end. The other thing to consider too is market volatility. If you experience a lot of market volatility early in your retirement, it can increase the likelihood that you'd run out of money. So again, it's something you want to talk to a financial professional about, talk to a financial advisor about, and if you want to talk to me, I'd be happy to sit down with you 1-on-1 and talk more.

That's our show for this week. If you want your questions answered during the show, go to our website: and click on “Ask a Question”. Go like us on Facebook to get our most up-to-date content. Subscribe to our podcast on iTunes, Google Play or wherever you listen to podcasts. And we'll see you next time where I'll show you how to Retire with your Eyes Wide Open. Don't go into retirement with your eyes closed, go into it with your eyes wide open. I'm Scot Landborg. See you soon!

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