Shawn Anderson: 5:10 on WTOP. If you are close to retirement or you've recently retired, you may have a good idea of what you plan to do during your first days of and maybe months of freedom. But have you thought about the 8,000 days or more that you are likely to spend in retirement?
Hillary Howard: I've got to tell you, I kind of have. Here to help us navigate all of that, Nina Mitchell, co-founder of Her Wealth and Senior Wealth Advisor at The Colony Group in Bethesda. Nina, always good to see you.
Nina Mitchell: Great to be here.
Hillary: So, you advise a lot of people who are approaching retirement to break up those retirement years into phases. How do you do that?
Nina: Well the good news is, is that we're living healthier, fuller lives and people in their mid-sixties today can expect to live at least another twenty-five or more years. And if you are approaching retirement and don't have a good handle on your finances yet, now is an excellent time to at least review our fearless financial plan for retirement checklist, that's on our Her Wealth website.
But retirement is really a lot more than just money. And our firm has been working with the MIT Age Lab, which basically divides a person's life into four equal parts of 8,000 days or about twenty-two years per part. And as you guessed, the fourth part focuses on retirement, beginning in your mid sixty's and it's called the exploring part. And with the help of the MIT’s Age Lab, retirees can really better plan for 8,000 more days since the MIT lab kind of breaks up each of the phases into four… or retirement into four phases.
And first, you've got the Honeymoon phase, The Big Decision phase, the navigating longevity phase and then you've got the solo journey phase. And in each of these phases covers changes in work, health, finances, marital status that you'll likely encounter during retirement.
Shawn: Okay, so most of the folks listening right now are somewhere on the way to the Honeymoon phase. Give us an idea of what you should be considering there?
Nina: Alright, well the honeymoon phase is characterized by having resources, good health and more time for leisure. So sounds great. But the beginning of retirement can also be a bit unclear as it relates to work; you know, you might still be working part-time or doing some consulting, maybe out of financial need or just because you want to keep your benefits or because you want to stay involved. And family dynamics are another important consideration, especially as it relates to retiring baby boomers, providing financial help to adult children and to their aging parents. Many retirees are in that sandwich generation and faced these dual challenges, which can impact their own retirement.
And one recommendation, is for new retirees to have a retirement mentor who is a retired person that is thriving emotionally, physically and financially, so you can have regular discussions from the situations they've already encountered.
Hillary: Alright, so let's move on to phase two; The Big Decision phase. What important things do folks need to consider?
Nina: Well phase two is when you begin facing some big tactical decisions, such as where to live, how you'll get around and who you'll spend your time with. And the MIT Age Lab has identified three simple questions to assess how prepared you are to live well in retirement. First, who will change my lightbulb? Now, this addresses more than basic home maintenance, it actually opens a conversation about housing options. Do you stay where you are? Or do you move to a retirement community?
Second, how will I get an ice cream cone? This speaks to the quality of life and having easy access to get around when you want. And third, who will I have lunch with? Lunch is more than just a meal, it ties into your social network, your activities, and your purpose. So, it's important to have meaningful conversations with your family, financial advisor and retirement coach to help you sort through all these decisions.
And why many retirees fear to outlive their wealth? There is actually an even greater fear of losing your independence. So, having a clear roadmap for each retirement phase helps reduce some of that uncertainty.
Shawn: Alright, this is all interesting stuff. We want to get phases three and four next week, right?
Nina: You bet.
Shawn: Alright. Nina Mitchell with The Colony Group in Bethesda. Read more at WTOP.com, search Her Wealth. And again, we'll do phases three and four in the eight thousand days of retirement next week.
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