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Work to Live

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06102015WorktoLiveWork to live is a popular phrase in my household. The idea is to make sure you take time away from work to enjoy life. Our philosophy is not all work now and all leisure later. In my first job out of college, one of the partners in the firm worked long hours and weekends. His goal was to retire young and then he would travel and pursue his hobbies. He died within a year of retirement. I think he was 56 years old.

As planners, we prepare retirement plans for the majority of our clients, recognizing that these are essentially goal setting plans. Work to retire is another common phrase, which doesn’t necessarily mean working non-stop until retirement. We have a number of clients who very much enjoy their work and have no definitive plans to retire, myself included.  We also do second career planning, which often involves planning to turn a hobby or passion into a business.

Working for healthcare is my most popular phrase currently, as I believe many of us without pre-retiree medical benefits will be working until we turn age 65. Age 65 is the age for Medicare benefits. Planning for the inflation on future Medicare premiums is difficult enough to forecast, much less planning for private insurance for retiring prior to age 65. Forecasting for future health care insurance costs and inflation is currently one of our biggest challenges to the success of our future plans.

For those of you have done retirement planning with me, you know I have a number of other phrases that I use often, some of which get me into trouble or come back to haunt me. One phrase that really stuck with a client was about the confidence zone in the MoneyGuidePro® planning software. I was trying to explain why a confidence zone of 75% to 90% is acceptable, and why you don’t need to plan for 100% confidence. I actually said, “You don’t want to live on cat food now to live on caviar in retirement.” That client hasn’t let me live that one down. I am sure glad our clients have a good sense of humor.

Another phrase that came up during my recent continuing education conference was about that same confidence zone and the probability of success. If your plan falls below the confidence zone, does that mean you failed? I am no longer using the phrase that your plan failed. It should be called partial success (and you won’t be eating cat food in retirement either). We approach financial planning as an art and a science; we combine the technical part of planning with the largest variable – you and your goals.

By the way, I am not working this week. I am going fishing. Part of living in Alaska is to get out and enjoy it. Work to live.

Cathie Straub, CPA, CFP®
Director, APCM Wealth Management for Individuals

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