The new retirement mindset

The retirement landscape is ever-changing. Working with baby-boomer pre-retirees and retirees for almost twenty years, I’ve recognized a shift in retirement philosophies.

The retirees I worked with fifteen years ago were determined to be debt-free, live on the interest and appreciation of their investments while never spending their principal, and hand down their hard-earned wealth to their loving children. They were conservative, frugal and very disciplined. They drove a rusty, yet trusty, Ford LTD. Their pension supported their retirement. They were content.

Today, many of my clients are buying BMWs and traveling to adventurous places in Europe. They have become exquisite wine connoisseurs. They are truly enjoying their golden years like a racehorse put out to stud after winning the Kentucky Derby. This enthusiasm for life is quite exciting, but their high cost of living without an income from work does present challenges.

These clients established a retirement plan early on and stuck with it, and they were also fortunate to have worked in the era of defined-benefit (DB) pension plans. However, the good ol’ days of the guaranteed pension are rapidly disappearing, with the risk having shifted from employers to retirees and their independent retirement account (IRA) or defined-contribution (DC) plan.

We would all like to believe that our retirement accounts will enable us to reach the goals we have worked so hard to achieve and comfortably ride off into the sunset after retiring. That said, no one has forgotten the dotcom bust in 2000, followed by the horrible 9/11 tragedy, and then seven years later a market meltdown and the worst recession modern-day retirees have ever experienced.

Negative events of this nature, such as market volatility and recessions, need not be as big of a concern with proper planning, and thoughtful asset allocation strategies. From an estate-planning perspective, this new modern retirement mindset may ultimately lead to less wealth being transferred to the next generation, as many clients are using the assets that they’ve accumulated more for enjoying their retirement years.

If investors are concerned with leaving a family-strengthening legacy for their loved ones while still enjoying the fruits of their labor in retirement, they should implement innovative financial planning to ensure proper execution of their wishes. Utilization of stretch IRAs, which extend the tax-deferred status of an inherited IRA when it is passed on to a beneficiary other than one’s spouse, and life insurance, can minimize tax burdens while increasing wealth transfer to loved ones. Financial advisors, estate-planning attorneys, and accountants need to discuss such options with clients on a more frequent basis.

As we hope to live longer, more fulfilled lives, the proper election of Social Security benefits also deserves a lot of attention. Retirement is all about having sufficient income and cash flow, that is, how much sustainable income can be produced from our assets combined with Social Security and Medicare. When you know that you can take vacations, buy your dream car, live comfortably, and know that your family will be taken care of, then and only then will we feel the benefits of a well-crafted financial plan.


Planning for retirement shouldn’t be a burden. Retirement should be a joyful period of our lives to appreciate the hard work that we have put into accomplishing financial stability. Starting to plan for this crucial part of our lives as early as possible should add great comfort moving forward and enable a wide range of decisions on how to spend our hard-earned money and enjoy our well-deserved retirement.

Frank Oliver is the president and founder of Oliver Asset Management, a boutique firm in Longmont, Colo., providing customized strategies for retirement income, with a focus on asset protection and legacy planning.