Keep Lines Of Communication Open On Retirement

BERLIN – Almost everyone nearing retirement fantasizes about what pleasures to pursue after the end of a career. Maybe you see yourself spending months on your boat or watching the kids prosper in the family business. Or perhaps you’re looking forward to sitting on the board of a favorite charity or training for a marathon.

Whatever your plans, it’s crucial to share them with your spouse, your family and your business partners.

“Don’t underestimate the number of people who will be affected by your retirement decisions — and how their expectations may differ from your own,” said Vincent E. Grogan, a director with the Retirement Group at Merrill Lynch. “Having honest, thoughtful discussions with family and business partners about your goals will identify practical issues you need to address and negotiate.”

Your mate may have lived through every peak and valley of your career, but you may not share the same ideas about retirement. “According to our research, spouses don’t always see eye to eye on what their retirement should look like. More than 70% of men said they looked forward to spending more time with their spouse, while more women were interested in focusing externally on work and community involvement,” says Grogan.

Evaluate your goals in the context of a 20- or 30-year retirement. “If your immediate goal is to retire to a warm climate to play golf, will that be just as appealing two decades from now?” asks Grogan. “It can’t hurt to keep the long view in sight and maintain some flexibility in your plan as your circumstances or desires change.”

Being clear about when you’d like to stop working is also vital. Many individuals say their vision of retirement involves some kind of work. If your partner delayed her career to raise a family, she may be hitting her stride at work while you’re anxious to wind down. To avoid resentment, discuss not only the financial implications of each of you leaving work but also how you’ll cope with disparate lifestyles.

For many, it makes sense to let your children in on your plans. You may intend to sell the family home to move to a seaside condo, or you may want to spend the rest of your life — and assets — saving African elephants. Whatever the case, your kids are likely to have more than a passing interest. “They may be counting on you, whether it’s for spur-of-the moment babysitting or an inheritance, and they may need to know what your plans for retirement are,” says Grogan.

If you expect to transfer wealth to your children, it pays to help them prepare as well. “Before you make your kids beneficiaries of your IRA or bequeath other assets to them, have them talk with you and your Financial Advisor about what it all means,” says Grogan. “Even the best intentions could translate into real tax implications for your heirs.” For some, establishing a trust is the answer. Or your kids may suggest bypassing them and setting up college savings plans for your grandchildren.

The same forethought should be given to passing on a business. “If you’re a business owner, you need to give some thought to a business succession. Do you want your business to endure? Will your partners or your children want to carry it on?” says Grogan. “The last thing you want is to be forced to sell quickly or at an inopportune time.”Achieving the life you want in retirement can require a number of critical and sometimes difficult discussions. Having those conversations though can make for a much more successful retirement journey for you and those closest to you.

(The writer is a Merrill Lynch Senior Financial Advisor. She can be reached at 410-208-9084.)