By Suzanne Patrick-Lawrence
The COVID-19 crisis has caused a lot of anxiety, to say the least. Many people in their 50s and 60s are now worrying about the viability of their retirement plans. In fact, 29% of pre-retirees in their 50s are now considering postponing retirement due to the coronavirus. (1) And as a business owner, your retirement planning has been a lot more complex than most professionals.
So if you’re now wondering whether you need to reevaluate your retirement plan and timing, you’re not alone. Ultimately, there are no easy answers to this question. But evaluating your overall financial picture and working with an experienced succession planner like Advisor Business Solutions can help you make an informed decision.
Benefits Of Delaying Retirement
Not everyone wants to hear it, but there are some benefits to delaying retirement. We’ve listed two common benefits below that other pre-retirees are thinking about when they choose to postpone.
Unlike many others, financial advisors are in fairly secure positions career-wise. As an owner of your own practice, you’re not at risk of being forced out of your job and into early retirement. You have the flexibility to decide when you want to transition out of or sell your business. Unless you plan to retire and start a new business, you may not have this option down the road.
Boost Your Savings
Predicting the future is impossible in a good year. But with the added uncertainty of the coronavirus pandemic, you may want to pad your retirement savings as much as you can. Delaying retirement allows you more time to contribute savings to your nest egg and recover from any losses you might have experienced. Plus, delaying comes with the added bonus of reducing the number of years you’ll need to take withdrawals from your retirement income.
Delaying also allows you to postpone your Social Security benefits. As you know, waiting to take Social Security means that your benefits will increase by about 8% per year up to age 70. If your nest egg has taken a hit, this option is worth considering.
Benefits Of Sticking To Your Plan
However, there are also benefits to sticking with your original plan. And if you’ve been preparing for retirement with a long-term strategy in mind, you’re probably on track to retire on time.
Most financial advisors have been able to work from home. But if you have a large firm, an office with tight quarters, or clients that prefer to meet in person instead of over Zoom, it may benefit you to retire early so that you avoid the risk of COVID-19 infection. Risking your health is probably not worth the extra years you could spend working. (Do we even need to say that?)
Exit With Confidence
If you’ve been planning to retire for a while, you may have already recruited a younger advisor that you’re mentoring to take over your business as you exit. Or you may have already started to phase out of day-to-day operations. Exit strategies are complex processes, and it may not be worth it to undo all the hard work you’ve done in preparation for this big life step.
Enjoy Life Sooner
Finally, there is an argument to be made for simply enjoying life sooner. You’ve worked hard for decades, and if you’ve wisely positioned your investments to withstand market volatility, it might be better for your health—mentally and physically—to retire now. This may be the open window of time to start enjoying quality time with your loved ones or starting one of many projects you’ve always wanted to but never had the luxury of time for—until now.
We Can Help You Decide The Best Course Of Action
If your current retirement plan still holds up, it may not be necessary to delay retirement at all. We believe that financial decisions should never be made out of fear. If you’re weighing your long-term plan or are open to adaptations, consider partnering with Advisor Business Solutions. After all, we’ve helped financial advisors wrestle with questions like these for nearly 20 years.
Take the first step and reach out by email at [email protected] or call 562-439-4804 to learn how we can help.
Suzanne Patrick-Lawrence is president and CEO of Advisor Business Solutions. She is a business planning and communications specialist with over 20 years of experience developing business and marketing strategies for financial services, global corporations, government agencies, nonprofits, and small businesses. She is passionate about working with financial advisor practices seeking guidance, support, and structure to position their firms for a successful transition. To learn more about Suzanne, connect with her on LinkedIn.