S2 E3: What Do Retirees Regret Most About Their Retirement?

You’re listening to The Wealth Mindset Show, where Hixon Zuercher Capital Management’s team of finance professionals, portfolio managers, and a life coach, come together to tackle complex topics in finance and retirement planning, so you don’t have to. From investment strategies and wealth management, to tax planning, retirement income, and aligning your money with your values and purpose, The Wealth Mindset Show offers the tools to thrive.

Austin Wilson:

All right. Hey, hey, hey, welcome to The Wealth Mindset Show, where our Hixon Zuercher team will have conversations on managing wealth, navigating retirement, and making smart decisions for a secure, meaningful future. I’m Austin Wilson, Director of Investments here at Hixon Zuercher Capital Management.

Josh Robb:

Josh Robb, Director of Wealth Management at Hixon Zuercher Capital Management. Together, Austin and I host this podcast, but we bring with us guests whenever we have a topic that they have some expertise in. So today joining us is Scott Miller. Scott, can you tell us a little bit about what your role is and a little bit about where you came from?

[1:02] – Meet the Team Guests: Jordan Shaw & Scott Miller

Scott Miller:

Yeah. I’m a certified professional retirement coach here at Hixon Zuercher Capital Management. I’ve been here about four years, and I’ve made the transition from a full-time career in dentistry for 32 years and transitioned into being a life coach.

Josh Robb:

All right, great. And then also with us is Jordan Shaw. He’s one of our advisors. But Jordan, tell us a little bit about yourself.

Jordan Shaw:

Yeah, Jordan Shaw, I’m a wealth advisor, certified financial planner. I’m on the earlier side of the career here, I’ve been doing this a little over six years, but really focusing in on helping people just go about managing and understanding every aspect of their financial lives, budgeting, cash flow, retirement, any of that. It’s something that I’m looking forward to doing for a long time.

Josh Robb:

Perfect.

[2:06] – Regretting the Retirement Decision & Timing

Austin Wilson:

Awesome. Well, today we are excited to be talking about retirement because that’s what a lot of we talk about here on the podcast or here in the office, but specifically, we’re going to be answering the question collectively, what do retirees regret most about their retirement? I mean, that is a question that can go a lot of different directions. Who has thoughts right off?

Josh Robb:

Yeah. Well, I’ll say again, for Jordan and I, being the advisors in the group, that’s probably one of the most probably concerning questions they have, or the thing they want to avoid is regretting that retirement decision. So, we spend a lot of time in that pre-retirement stage and I think we’ll talk about that a little bit, on how we try to avoid that.

But as I look at it, Scott, you do the non-financial side of it and I think there’s a lot of regrets in there. For us and the financial side, the primary regret I see, and I think where probably a lot of our conversation will revolve around on our end, is the timing aspect because that’s to them is, I wish I would’ve done this sooner, or now there’s some issues that happened, man, I probably shouldn’t have made that decision. Right? It’s a timing thing for a lot of the people we work with. Jordan, I don’t know if you had any other thoughts there.

Jordan Shaw:

Yeah, I would echo that, absolutely. Wish I had done this sooner, is the number one thing that across the board, it doesn’t matter what we’re going about addressing with a client. It could be the basic things like saving for retirement. It could be things like updating their estate documents. And I mean, there might be more things that people are thinking about in their head, but what comes out of their mouth is almost always, “I wish I had done this sooner,” when it comes to regrets that they face.

Josh Robb:

Yep. Scott, what about you on the non-financial side? What are some of the things you hear when they’re talking about that regret?

[3:37] – The Lifestyle Changes & Preparation Needed to Retire

Scott Miller:

Yeah, I think on my side of things, I think it’s very similar to what you guys just talked about, but the statement that I hear all the time is, I wish I would’ve been prepared for the changes in retirement. And the keywords there are prepared, there people are not prepared. And changes, there is a lot of change when people go into retirement. And really what they’re verbalizing there is, before retirement they have this dream of what retirement is going to be. It’s going to be this lifelong vacation, it’s going to be all these really wonderful things, which it really can be, but they really feel like they’re just going to slip into that. So it’s really the difference between that, what they’ve dreamed of, and just really the reality of retirement.

Josh Robb:

Yeah, and I think that point is really important, is that regret usually has to do with what they pictured it would be and what it ends up being, right?

Scott Miller:

Right.

Josh Robb:

Is that difference between the vision and what actually happens, right?

Scott Miller:

Yes, that’s correct.

Josh Robb:

And wishing they would’ve either better understood it or had done things to prepare for, where the actual outcome would be. That’s right.

Austin Wilson:

So Scott, this is probably a good question for you then. What are some of the actual realities of people in retirement that they don’t often think of before they get there? Things they should, we can tell people looking at, we know hundreds of retirees, this is what retirement’s probably going to look like, but you had a misconception going into it, right?

[4:57] – The Realities of Retirement & Misconceptions

Scott Miller:

Right. I think they’ve been subjected to this marketing where they really thought that, hey, retirement is just one big, long vacation. It’s a life of leisure and golfing and doing all these fun things, which it certainly can be that, but there’s a lot of other things that they need to prepare for. What am I going to do with all my time? And so they certainly have a sense of loss when they move into retirement. There’s this loss of structure and identity and just that kind of, what am I going to do every day, and friendships and those kinds of things. But there’s also them being just lost. They really don’t know, like, what am I going to do next? Where am I going to go? What am I going to do with my life? So those are some of the kind of things that they really struggle with, in terms of as they make that change or that move into retirement.

Austin Wilson:

I almost feel like if retirement was actually, as everyone sees it on TV, you sleep until 10:00 and you go live at the coffee shop and you go golfing, and that’s all like it’s a chill vacation for 30 or 40 or 50 years, whatever that is. I feel like that would probably be disappointing. Ultimately, there is so much more life outside of what we’re told retirement is, that people just, they don’t want to think about or they wait till they get retired and then they’re like, oh my goodness, I’ve got to do something.

Scott Miller:

That’s right.

Josh Robb:

And I think too, from the financial aspect, some of that regret too comes from that idea of maybe postponing things they could have done before, thinking they would do it in retirement. And I know you and I talked about this, you got back from a trip and you said there’s things that you saw people there unable to do and they may have pushed that off and saying, “When we retire, let’s do this.” And then physically they’re just not able to. And I’ve heard quite a few people say, “Man, I wish I would’ve allocated some resources and time while I was young and working to do some of those things.”

Scott Miller:

Yeah, there’s definitely some things you can do in your 60s and maybe earlier 70s, that you can’t do later on in life. And so when it comes, especially to travel and just doing some of those things, those bucket list of things that you want to do in second half of life, you need to do those earlier and plan for those.

[7:08] – Avoiding Financial Pitfalls That Come Early in Retirement

Austin Wilson:

Yeah, so let’s go back to the financial side. So advisors here, let’s talk about some practical steps that we can do and that we can encourage people to do as they’re starting to think about preparing to avoid some financial pitfalls early in retirement.

Josh Robb:

Yeah. Jordan, do you have any thoughts or what you recommend to people as they’re kind of in that phase-

Austin Wilson:

Getting up to, right.

Josh Robb:

… into retirement, maybe that last five to 10 years?

Jordan Shaw:

Yeah, I mean, there’s the obvious one, right? Make sure you’re saving what you need to. And you can only really understand what you need to save if you know what you relatively will be spending, what your goals are from the finance side in retirement and beyond. And I think that is a very vague idea for a lot of people who are in that stage. They just don’t know, so they turn to an advisor, another professional, help me figure out what I can even spend, what I do spend. So there are a lot of nuances with that, even though it’s a very basic thing that people know that they need to do. But once you can have a conversation with someone who can help you figure out, how do you at least zero in on an estimate of what you need to save in order to reach those spending goals in retirement, that really is kind of the biggest thing. And probably most people know they need to do that, but I just want to make sure that it comes to mind first because it is very important.

And then outside of that, it’s really having an understanding of, like you said, with the lifestyle, what it’s going to be like and how that is going to impact what you’re spending. Because those changes that are coming, I think all the messaging and everything is filling our minds with these positive ideas and things, but there really is a lot of preparation that you need to go in. If something is good that’s coming, I don’t find myself thinking, I need to prepare for this, because it’s a good thing, I’ll just flow right into it. But with all the challenges that come with it, there is a lot of preparation that is required, and it impacts the non-financial, it impacts your finances, health things come up in retirement that people don’t want to think about. There’s a lot of things that you can’t just say, “Here’s the number I’m going to spend each year in retirement.” It’s going to fluctuate and being able to have some flexibility built into whatever your financial plan looks like is important.

Josh Robb:

Yep.

Austin Wilson:

Josh, yeah, what about you?

Josh Robb:

Yeah, and part of that is, especially if you’re going to be making an adjustment to your lifestyle, I always encourage them, try it out. Spend that last year living on the budget you think you’re going to do in retirement. So, if you’re making a change to your cash flow and say maybe you’re earning 100,000 but you’re planning only living 70,000 in retirement, live on 70. What does that actually feel like? And see, get used to that cash flow and feel.

And then the other thing, practically speaking, is for a lot of people, especially early in retirement, spending big chunks of money on home projects, things like that is hard to do, because they’re still getting used to that outflow of their cash. So what I encourage a lot of times is, any projects or expenses you know you’re going to do, if you can do those those last couple of years you’re working, it’s a little easier psychologically to spend that money when you have income. So if you say, “Hey, you know what? I think we’re going to remodel our kitchen,” maybe do that while you’re still working, while you have income. It’s just easier for you. It still probably works in your financial plan, but mentally, getting to that point to say, “Hey, it’s okay to spend that money.” It’s easier when you have that cash flow. So, prepaying any of those expenses and then getting used to your spending budget are two things, those last maybe five years, you can start getting used to that next phase.

Austin Wilson:

So Scott, on the non-financial side of things, I like to think of, if you work, you work, you work 30, 40 years in your career. You go to work every day, you’ve got eight hours a day, five days a week, rough, that’s on average, 40 hours a week that you’re at work. My thought is, you have to find a way to use that time to find fulfillment, right? Find a reason to get out of bed in the morning. How can retirees look at structuring their life to really design what works for them going forward?

[11:17] – Retirement Recommendations from a Life Coach

Scott Miller:

Yeah, a couple of things, is first of all, in Refocus Coaching we really recommend to people to continue to work. The actual, if you look at the dictionary definition of retirement, it means to stop working. And that’s actually, I think the worst thing that people can do. They just need to keep working. It may not be working for a paycheck or working like the career that they have always done for the last 30 or 40 or 50 years, but they do need to work at something, and so we really encourage that.

I think the other thing is just focusing on health. Everybody looks at the second half of their life and say, “I want to live a healthy lifestyle. I want to live a good lifestyle.” And part of that is just physically, mentally, spiritually, being in good shape, wellbeing. And so that means focusing on exercise, just moving your body every day. You now have that time to do that. You can schedule those kinds of things in. Have a membership at a gym or at a YMCA, something like that, where you’re joining maybe a group of people where you’re even connecting with people relationally. But again, just exercising, eating better. I think it’s also an opportunity to eat healthier. We’re not quite as busy in our lifestyle so we can eat healthier. And so those are a couple things in terms of focusing on health.

And then relationships. I think just really, really important for us to focus on relationships. We know that on the dark side of retirement, we see a lot of isolation and loneliness that happens in this kind of second half. And so, we really have to replace our work meets with play meets, really-

Josh Robb:

Because you spend 40 years spending the majority of your day with this group of people.

Scott Miller:

That’s right, with that group of people, right.

Josh Robb:

And then you no longer have that connection.

Scott Miller:

That’s exactly right. Yeah.

Josh Robb:

And so there is a void there, you’re right.

Austin Wilson:

And ultimately your spouse. This is a big change for your spouse, right?

Scott Miller:

Yes.

Austin Wilson:

So you’re used to spending-

Scott Miller:

That’s right.

Austin Wilson:

… 40 hours or more at work and then all of a sudden you’re home all the time.

Scott Miller:

Oh, wow.

Austin Wilson:

There could be some challenges, and I’ve heard this statistically speaking, that’s a very rough time oftentimes for marriages, specifically. So, something to think about and get a plan in advance with your spouse of how that’s going to play out, right?

Scott Miller:

Yeah. There’s two things that are going on at the same time. Retirement, a lot of times happens also with empty nesting. So, the kids are out of the house, and so now yeah, there’s a lot more time together. I feel on the good side of things, that this is a time that you can actually really improve your marriage, make it stronger, make that relationship better. But like you said, Austin, it is a time that we spend a lot more time with our spouses. We’re at home a lot more, there’s a lot more free time. And so yeah, we have to work hard at this and just improving those relationships.

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Josh Robb:

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[15:33] – Lessons from Clients Who’ve Successfully Retired

Austin Wilson:

So Jordan, think about all the clients that you’ve advised and talked through their financial situation as they enter retirement. What are some lessons from clients that you know have successfully transitioned to retirement, that they would definitely look back and advise their younger selves or someone who isn’t quite there yet?

Jordan Shaw:

Yeah, just coming from looking at the finances, the client’s number of success or whatever their portfolio needs to be for them to be successful is different for each person. But the individuals that I’ve worked with who absolutely would say, “I’m doing great in retirement and my portfolio takes care of my needs and things,” the key word that comes to mind with those people is flexibility. Specifically in terms of how they’ve saved throughout their life to prepare for retirement. And it’s not just a dollar amount. Most people, if you approach them at, it doesn’t matter where they’re at in their working career, they know they should be saving for retirement. They might even know what percent of their income they should be saving for retirement.

But I think something that often gets overlooked, and I know this from speaking with people who are on the earlier side of their career, people born after 1990, let’s say. There’s still a lot of ambiguity when it comes to the difference between pre-tax, after-tax, Roth, brokerage accounts outside of retirement. These are different options. And some people have even more than that that’s available within their employer benefits maybe that they can take advantage of. But most people have more flexibility, in terms of how they’ve saved from a tax perspective throughout their working career, that when they reach that retirement age and beyond and through retirement, they don’t have to worry as much about, I have some health concern that’s come up. I need to take a little extra than I thought, and oh no, it’s going to create this huge tax burden that I wasn’t prepared for. There’s some wiggle room there that they’ve prepared for throughout their working career.

Josh Robb:

Yeah, having different buckets makes a big, big impact, that you have a little more flexibility. And that was the word I kept coming back to was flexibility, is as you enter retirement, your plans will change. And I think, I know, Scott, you talk about how many different times they try different things in retirement. And you have to be flexible because health, life, family, there’s going to be changes. And that if your original plan was to golf and do this and that, there may be things that show up. If your original plan was to golf every day and then all of a sudden there’s a health issue, a family member that you got to take care of, you got to be willing to adapt and adjust, because your beginning or early phase of retirement will not look like your end of retirement. You’ve got to make those adjustments along the way. But I think being willing and open to flexibility is not saying, “Man, I failed how I planned for retirement,” it’s, “I had to adapt and change my retirement.”

Austin Wilson:

So Scott, let’s take this from financial to non-financial. So, based on your experience as a retiree or working with retirees, what is a non-financial lesson that people who aren’t retired should probably know that they don’t right now?

[18:16] – Finding Your Purpose Prior & In Your Second Half

Scott Miller:

Well, I think you guys have kind of alluded to this already, is really discovering your purpose. I think purpose is a big part of this whole equation. Notice I didn’t say find your purpose. A lot of times that seems like that’s something out there that we need to go discover, but I think every human being has purpose, has a purpose inside of them. And really trying to figure out what that is as they kind of look into the second half of their lives. So many people when they retire, they lose purpose. They lose their identity, who they are, because that job was all they were. And now, I just think we need to view ourselves as part of something much bigger than ourselves.

For instance, we’re part of a neighborhood, we’re part of a city, we’re part of a community. There’re things that are much bigger than ourselves. And when we look at our lives like that and then just think about what our purpose is within that, and being involved in something greater than ourselves, there’s much more satisfaction in all that than just simply doing things for ourselves. And so again, discovering that purpose. And when we do this in our workshops, we start with identity. Thinking about who you are, like what’s our skills? What’s our talents? What’s our abilities? So, we start by answering that question because if you want to know, discover purpose, you first of all need to know who you are, so.

Josh Robb:

That’s right, yep.

Austin Wilson:

So does anyone have an example maybe of a success story where there was a client with a either financial or non-financial problem in retirement, and how you worked together to come up with a solution that really set them up for success?

[19:41] – Retirement Success Stories

Josh Robb:

There’s been quite a few, and I’m kind of lumping a handful together in this example, but they’ll come with the idea of maybe their ideal retirement. And then we look at the reality of assets and what they’ve saved and how much they want to spend. And then I tell everybody, “Look, you can retire at any time. I’m just going to show you what that looks like. And then you decide at what point does that retirement equal what you’d like it to be?” And I just can think of examples where we’d had to tweak maybe the expectations or when that timing was, to best align what they wanted to get out of it versus what they had available.

And I can think of one in particular where they were willing to maybe spend a little less in retirement so that they could do that sooner. And I think for them, going back to purpose and happiness in the success was, you know what? That extra money isn’t really what’s going to bring us that joy. It’s that extra time we’re going to have, relieving that stress of that work. And seeing them kind of come to terms with that and say, “You know what? I think we’re going to be happier spending this sooner than waiting and kind of pushing or prolonging it just to get a higher dollar amount.” And I can think of those situations where, and now we’re maybe four or five years after, they’re very happy. And I don’t think they regret at all making that decision to go earlier because time was the most valuable thing they were looking at, and they were willing to make that trade.

Austin Wilson:

Does it sometimes go the other way too, where you pull together what someone expects in retirement and then their assets and actual financial situation, and you’re like, you could have retired like five years ago. Go party, go to Italy or whatever.

Scott Miller:

That’s right. Go to Italy.

Austin Wilson:

Beautiful.

Josh Robb:

Usually you phrase it not, “You should have done this,” but, “Now look what you can do.”

Scott Miller:

Yeah, you can do anything you want.

Josh Robb:

You have this much more flexibility.

Austin Wilson:

Yeah, those are fun conversations, right?

Josh Robb:

Those are the fun conversations. And then also, along with that is when someone says maybe, “I don’t need…” they retire, they say, “You know what? I don’t need all this extra. What can I do with it?” And that becomes a really fun conversation where we start talking about legacy and gifting and all the things they could do with this kind of excess they thought they may need, but they’re happy and content spending maybe a little less just because they found maybe those things that drive purpose that just don’t cost as much as maybe they thought they were. And those are great conversations, I love those.

Austin Wilson:

Any other examples from either of you guys?

Scott Miller:

I mean, I just look at my own life. I mean, I’m kind of living all of this stuff, really. And I get an opportunity to do something that I believe I’ve been preparing for the last 20 to 30 years, and that’s being a life coach. And one of the beautiful things about it is, I don’t have the stress levels. Okay, for those of you who don’t know, being a dentist can be really stressful, busy schedule and the lifestyle. So, I like going from that to something that’s just not as stressful. I’m a developer by nature; I love pouring myself into other people’s lives. And so we’ve seen that in a number of people that I have worked with who have been kind of burned out from their previous careers. Financial really isn’t the issue with them, they’ve made plenty of finances, but they’ve been able to then transition into something brand new. A new chapter of their lives, something they’re super excited about, maybe they’ve gone back to school, they’re learning something new. And then they’re taking that and applying it to helping others, so.

Josh Robb:

And I think you’ve brought it up a couple of times, is that retirement is usually viewed as completely stopping work, right? And for a lot of people, and we even see this statistically, a lot of retirees do something in retirement and a good portion of that earns them some sort of income. Doesn’t usually replace their prior one, but there is… And I think that’s kind of this new mindset is, retirement’s just a transition. And there’s probably a better word for that because you usually stay involved in something, whether it earns your money or not, you are active. And I think you said that, you continue to work. Just the way we view work, showing up at a job every day is different, right?

Scott Miller:

Schedule, yes, yes.

Josh Robb:

But you’re engaged in something, and I think you’re right. That’s the most important thing I think of when it comes to regret versus happiness, is that sense of finding what that activity is that gives you the engagement that you need, as well as the benefits of staying mentally and physically active, because you need that.

Austin Wilson:

My dad jokes that he’s a terrible retired guy because he’s doing part-time stuff in retirement. I’m like, no, you’ve actually got it figured out.

Scott Miller:

No, that’s great.

Austin Wilson:

You actually cracked the code.

Scott Miller:

That’s very good.

Austin Wilson:

Yeah. Any thoughts, Jordan?

Josh Robb:

Jordan?

Austin Wilson:

Yeah.

Jordan Shaw:

Yeah, I mean, I would echo everything you guys are saying too, and with this question and really this whole topic, success in retirement, it just looks so different for each person. And I think that most clients that I come across, my own ideas of what their successful retirement look like are usually vastly different than what ideas they have. So, it’s been important I’ve found to figure out, what is most important to this client, this individual across the table from me? And figure, how does that fit in with what makes sense financially, non-financially? And I think when those two things can come together, it’s our job to help provide information and let people know that maybe retirement isn’t going to be as easy and let people know about those roadblocks that they might come across to prepare for that, but also say, “It’s your life, Mr. And Mrs. whoever it is,” and help to understand and give them the tools they need to do what they want.

Maybe they’re retiring a little early than, as an advisor, than it looks like they maybe should, but seeing that they’re aware of what would happen could happen. Usually that leads to a better outcome for that person. And oftentimes, that is what’s best, and we sit here and say, “Okay, it doesn’t always have to be a certain way.” So just learning from my side to be flexible too, giving advice in that area helps the client find what success looks like.

Austin Wilson:

Absolutely.

Scott Miller:

That’s really important, Jordan. When it comes to the non-financial side of things I think especially, there’s no simple equation. You can’t just plug a person into this equation. There’s not a one-size-fits-all retirement. It’s different and unique for every different person. And that’s why I think life coaching, financial advising is so important because we come alongside people and just help them take a look at who they are and their goals and their values, and then really think about what can be a successful retirement.

Austin Wilson:

Well, thank you Jordan, and thank you Scott, for joining Josh and I today. If you found value in our conversation, forget to subscribe to The Wealth Mindset Show on whatever platform you’re listening on so that you never miss an episode. Also, feel free to visit us at thewealthmindsetshow.com for more resources, or if you’re ready to tackle retirement, which as we talked about today, financial side, non-financial side, a lot of things, you don’t have to do that alone. You can head over to Hzcapital.com if you’re ready to invest with us, and we’d love to talk to you to see if we can be a fit and help you out. We also invite you to follow us on all social media platforms to stay connected, and thank you for listening, and we will see you in the next episode. Thanks.

Josh Robb:

Bye.

Scott Miller:

Thank you.

Thank you for joining us at The Wealth Mindset Show, where we tackle the complexities of finance and life planning to help you align your wealth with your values. We hope today’s conversation provided value and clarity as you navigate your financial journey.

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