Nearly half of retirees stop working earlier than they planned, not because they're financially ready but because life forces that decision. Could be healthcare changes, family responsibilities or company downsides. So if you're still working at age fifty nine or sixty understanding whether you need to stay in the workforce has never been more important because the real risk isn't retiring too early, it's being pushed into retirement before you've had the chance to build the plan that supports the lifestyle that you want and the surprising part is this, most people working past age fifty nine aren't doing it because they lack savings, they're doing it because they're missing clarity. After helping hundreds of families in this stage of life, we here at Rubino and Liang Wealth Partners can tell you that many people who think that they're not ready to retire actually have far more options than they realize. The problem usually isn't a lack of savings, it's a lack of structure. So in this video I want to share some brutally honest advice about what it means to keep working past age fifty nine and how to figure out whether you're doing it by choice or by fear. Let's get right into it. If you're somewhere around age fifty nine maybe age sixty, you're in a strange spot, you're not quite ready to retire but you've been saving and working toward it for decades and you've probably caught yourself wondering, shouldn't I feel more confident about this by now? Most people at this stage, again they don't lack savings, they lack clarity because thirty to forty plus years, everything's been about accumulating, right? Putting money into accounts but around this age, the question starts to change, you stop asking how much do I need or how much do I have and you start asking well how do I start actually using this without running out of it? And that's the moment when most people realize there's no clear playbook for this next phase of life. According to Fidelity's twenty twenty four retirement mindset study almost two thirds of workers between age fifty nine and sixty four say that they don't know when they can afford to retire even though most have been saving for decades. And that's not a money problem, that's a planning problem because what worked in your forties and your fifties saving, deferring, accumulating, it isn't the same approach that gets you through retirement. At age fifty nine you're standing at a hand off point where the goal shifts from building wealth to building income. You go from how much do I have or how much do I need to how long will it last and how do I use it wisely. And this is the part that no one really teaches you in your working years and once you understand that shift you can start turning that confusion into confidence. But even when people begin to understand the shift, many pull back on that one familiar idea to feel safe. Right? I'll just work a few more years and sounds reasonable but for a lot of people in the early sixties that assumption is exactly where things start to go sideways. Most people in their late fifties or early sixties tell themselves that same thing, I'll just work a few more years, build up my savings, play it safe And on paper that sounds reasonable, you stay employed, you keep benefits, you delay withdrawals, what could go wrong right? But work doesn't always cooperate with the timeline that we imagine. Again, health changes, employers restructure and sometimes we just get tired. According to a twenty twenty four report from the Employee Benefit Research Institute, nearly half of retirees said that they left work earlier than planned and the top three reasons weren't financial. They were health, caregiving responsibilities and company downsizing. And that's a wake up call because even though working longer feels like a financial decision, it's oftentimes not your decision to make and that's where the emotional side of planning starts to show up. People just assume that retiring early is risky but in many cases the bigger risk is not being prepared if work stops earlier than you expected it to. And this is why we always tell our clients retirement planning isn't about quitting work, it's about having the option to stop on your terms. You see when you reach a point where work becomes optional you regain control over your time, stress and choice even if you choose to keep working. So this stage of life isn't just about saving a few more dollars, it's about shifting your plan from earning security to owning it. Now once people begin to feel that sense of ownership, the next challenge isn't investments or taxes, it's understanding what life actually costs and this is the part that catches more fifty nine year olds off guard than anything else. If you ask most people how much they need to retire, they'll throw out a round number, one million maybe two but the real question isn't how much you've saved, it's how much life actually costs. That's where most retirement plans start to fall apart. Not because of bad markets but because people never stop to measure what their lifestyle really requires. If you're in your late fifties or early sixties, you've likely built habits that feel normal. Right? Certain travel, helping kids, home maintenance, eating out, gifts, small comforts, all these things that make up the rhythm of your life but when the paycheck stops those habits still cost money and according to the Employee Benefit Research Institute's twenty twenty four spending patterns study, the average retirees household expenses only drops by about fifteen percent in the first ten years of retirement which is far less than most people expect and that's a wake up moment because if you're playing around the idea that spending will automatically go down, you could underestimate your real income needs by thousands of dollars each year. This is where the concept of Portfolio Income Needs or PIN becomes essential. Instead of chasing a big round number focus on what your portfolio needs to produce to cover your lifestyle. Your portfolio income needs or your PIN is the amount of income that your investments need to generate after social security, after pensions and after any other fixed income sources are considered. It's not an overly complicated formula, it's simply your annual lifestyle costs right separated into essential expenses and discretionary expenses minus your guaranteed income which leaves you with the income net again so after taxes that your portfolio must produce that year. That one number forms the basis for almost every retirement decision. Most people have never calculated it but once they do they finally see whether they're working because they want to or because they're afraid of a number that they've never actually calculated. Knowing your PIN also reveals whether your current savings already can support your lifestyle or whether some adjustments are needed. And once you understand what your lifestyle really costs, another question naturally comes in. How do you turn your savings into income that you can count on even when the market doesn't cooperate? And that's the part that most people never get taught but it's what makes retirement feel stable. Once you understand what your life costs, the next question becomes where will that money reliably come from each month? And for decades, your paycheck handled that automatically, right? Now that your portfolio has to take over that role, that's a big psychological shift. Most people worry about what the market will do next but the real question isn't what the market does, it's which parts of your plan depend on it. Here's how to think about that. Every retirement income plan can be divided into three layers what we like to call the Income Planning Pyramid. At the base are your essentials, the non negotiables like housing, groceries, healthcare, insurance. Those should be funded by income sources that are as steady as possible whether that's social security, pensions, annuities or other predictable distributions. That middle layer is your lifestyle, like the things that make retirement worth living. Flexible parts of your budget like travel, dining out, hobbies, helping the kids or grandkids. These layers can come from things like investment withdrawals, dividends or part time income. Sources that can fluctuate a little but are manageable. Manageable. In the top layer is legacy or long term goals, right future gifts, charitable giving or maybe inheritances. Money earmarked to this can stay invested for growth since they're meant for later. So when your income plan is structured this way you can live your life without constantly checking the market. Your essentials are secure, your lifestyle has flexibility and your future still has room to grow. If you want to get a feel for where you stand try this simple exercise tonight. Take out a notepad and make two columns. On the left is your list of monthly needs. On the right is your wants. Then right next to each need which source of income would cover that. If there's a gap where a need has no reliable income source yet, that's where your planning should focus. The goal isn't to predict every market swing in retirement, it's to make sure that your paycheck or however you define it keeps showing up even when the markets don't cooperate. Now once you understand how your income is structured, there's a factor that most people overlook and it has nothing to do with the market, it's taxes and they can shrink a retirement plan faster than volatility ever will. People assume that the big threat to retirement is market volatility but taxes have a much bigger impact especially once you start taking withdrawals because in retirement taxes don't disappear they just change shape. Most people think their taxes will go down when they stop working but for many retirees that doesn't happen. When income shifts from paychecks to withdrawals, every dollar from a traditional IRA, four zero one ks or pension is still fully taxable as ordinary income. Add social security and investment income on top of that and it's easy to push yourself into a higher tax bracket without even realizing that. And according to JP Morgan's guide to retirement, more than seven in ten retirees pay more in taxes in their first five years of retirement than they did in their final five years of working. That's mostly because of poor withdrawal coordination and that is why strategy matters. Think of your retirement assets as being held in three different tax buckets. There's tax deferred like your traditional IRAs, 401Ks, 403Bs, this is money that you'll pay taxes on when you withdraw from them. There's tax free which are like Roth IRAs or Roth 401Ks, that's money that's already been taxed so future withdrawals are tax free. And then there's taxable accounts which is a brokerage account or an after tax account like a savings account. These investments generate capital gains or dividends each year. Most people focus on how much they withdraw but where you withdraw from and in what order often makes a bigger difference. If your withdrawals aren't coordinated across tax brackets and tax buckets you could lose thousands sometimes tens of thousands over the course of your retirement. The Fidelity twenty twenty four Retirement Income Study found that retirees who review their tax plan each year pay ten to fifteen percent less in lifetime taxes simply because they can control when and where they take that income. It's not about avoiding taxes, it's about avoiding surprises. If coordinating your tax buckets or mapping out your tax brackets feels complicated, you're not alone here. You can use the link below and walk through it with our team to make sure that your process feels a little bit more manageable And once you understand how income and taxes interact, the next challenge is something that no one can really escape, and that's time. And this is where even strong retirement plans can start to drift unless you update them. Your financial life isn't a finish line, it's a system that needs feedback. The biggest misconception about retirement planning is that it's one and done. Retirement isn't a five year plan, it's a twenty five to thirty year journey and your needs will change throughout that time. Your spending will shift, your health might change, your tax situation evolves, your goals may adjust, even a solid retirement plan can drift off track if it isn't revisited regularly. Durability in retirement isn't about having the perfect plan on day one, it's about adjusting your plan so that it stays relevant and supportive as your life unfolds. Every few years or any time life changes, ask yourself, how is my income plan performing against what I actually need? Instead of tracking market performance, track income performance whether or not your portfolio is still producing what your life requires. If your plan is falling short that's not necessarily failure it's just a signal. Maybe you need to strengthen your income sources, adjust your withdrawals or realign investments towards stability. If your plan is strong that's confirmation, keep reinforcing what's working. If your plan is already ahead, you might look for ways to sharpen it by reducing taxes, improving efficiency or building a more flexibility for the future. This kind of diagnostic approach turns longevity risk into a manageable process. You're no longer guessing whether you'll have enough, you're measuring progress against what matters most, your lifestyle. Now when your plan evolves with you, your confidence doesn't just depend on the market, it depends on your ability to adapt and durability is important but it only works if you turn it into a habit and that's where the final step comes in. Creating a rhythm that you can rely on each year. By now you've seen how all the pieces fit together. Knowing what life costs, creating reliable income, managing taxes efficiently and keeping the plan sustainable. This final step is about implementation, turning strategy into rhythm because a plan only works when it's lived. Start with an annual check-in. Once a year, down and ask, has anything changed in my spending or my lifestyle? Have my income sources shifted and am I still on track to meet my income needs? These are simple questions but they keep you engaged with your plan instead of just guessing about it. Then revisit your income testing, recalculate your PIN and see how your income sources align with your current tax brackets and goals. If your income plan shows strain, again tight margins or rising withdrawals, that's your cue to address any underlying needs. If it is steady, just reinforce what's working. This diagnostic rhythm is what keeps your retirement adaptive for years to come. Again you're not trying to predict the future but your retirement plan shouldn't be like an Atlas, want to think of it more like a GPS guide. Always looking for potential traffic or roadblocks and calculating the best route forward and you don't have to do this alone. Working with professionals who understand the full retirement transition not just accumulation, they can give you clarity that generic calculators cannot. A good financial advisor can help you coordinate income, taxes, healthcare and investments into one clear system that supports your life. Retirement confidence doesn't come from having all the answers, it comes from having a process that helps you find them again and again. If you're fifty nine or older and you're wondering whether you're still working out of choice or out of habit, this is the perfect time to get clarity. If you want help running those numbers or understanding your options, click the link below where you can schedule time to talk with our team. We'll go through your situation together and guide you through the process to see the bigger picture clearly. Until next time, take care.
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