not necessarily have to be monetary; they can be anything from
setting up a nonprofit or foundation, to learning a language, taking
up golf or hunting, beginning to knit or sew, or traveling.
If you have a partner, he/she should make a separate list. After
both are complete, create a third line-up of goals you would like
to reach together. When that’s done, share your individual ideas
and see where they are similar. The exercise is designed to get
you thinking about dreams that you have put off because of time
constraints or other factors.
It’s one thing to talk about what you would like to do in
retirement and another to write it down and hold yourself
accountable. And there is always satisfaction in knowing that
you have accomplished what you set out to do. Creating lists
helps you build a framework for how you want to spend your
time and ensures that your values align accordingly. The lists also
provide guidance as you identify your desired spending needs
in retirement. Clearly, traveling to Africa or Europe, or studying
pottery in China will take more resources than learning a
language or golf. Knowing your projected spending ahead of time
allows you to prepare for the retirement you want and to make
the necessary changes before it is too late.
Of course, you’re not going to be able to hit all of the curve balls
that life throws at you, so it’s best to keep your vision flexible.
At some point your health or other factors may come into
play, diverting you from your original course. Be willing to make
adjustments, and seek advice to help make sure you’re on the
right track.
What to do about the business
By the time you leave full-time employment, you will have spent
40-plus years establishing a working legacy. Developing a vision
for the post-career years won’t take nearly as long, but it’s going
to take more than a few hours or even a few days. We’re talking
about the rest of your life, so thoughtfully weighing options is
vital to drawing the right conclusions.
When you begin the process, give yourself (and your partner)
time to think about your future. This is especially true if you
are a business owner. In Dancing in the End Zone: The Business
Owner’s Exit Planning Playbook, author Patrick Ungashick
estimates that about 9 million of America’s 15 million business
owners were born in or before 1964. That means millions
will soon be in a position to transfer business ownership.
Unfortunately, Peter Christman, founder of the Exit Planning
Institute, estimates that about 75 percent of business owners
don’t have an exit plan.
Business owners will have additional questions to consider
regarding the transition of a business such as:
• Sell it to family members, or a third party
• Gift outright to family members
• Create a plan that combines a sale and gift
If you are contemplating a transition to family members, you
should consider utilizing a trust. It is important that you consider
the permanency and income tax implications of different types
of trusts for yourself and the beneficiaries. Understanding the
cash flow from each of these options is critical, in addition to
making a decision on how you will or will not stay involved in the
business.You could remain the majority owner, but turn day-today operations over to a management team. Maybe you will work
part time or as a consultant. These types of arrangements are a
compromise between involvement and income, but may be the
best route for you to achieve your goals.
Looking forward with confidence
Whether your idea of retirement includes working, volunteering,
traveling, or some other activity, it will require a shift in the
balance in your current life. Articulating your own unique vision
is the first step forward. Once you have established a road map
and understand the kind of lifestyle you want to retire to, you
can build a financial plan that aligns with your retirement dreams.
Cheryl Starman-Coombs, CPA, CFP®, Senior Wealth Advisor,
CliftonLarsonAllen Wealth Advisors, LLC
[email protected]
612-376-4520