Advice from SCE Retirees to Workers Nearing Retirement: Wisdom for Your Golden Years
As you approach retirement, the blend of excitement and anxiety is natural. The promise of more leisure time and less daily grind is enticing, but getting there requires thoughtful planning and strategic decisions. Fortunately, retirees have walked the path you're about to tread and have invaluable insights to share. Here’s a roundup of the best advice from those who’ve successfully navigated the transition, with a special focus on why collaborating with a financial planner is crucial.
1. Start Planning Early
Many retirees agree that the earlier you start planning for retirement, the better. Start by assessing your financial situation, setting retirement goals, and figuring out how much you'll need to save. The more time you have, the more opportunity you have to adjust and optimize your plan.
“I vowed to retire early so I could enjoy my later years. What were my strategies?
When I became eligible to participate in the 401k program, I contributed enough so that SCE matched at the highest rate. In later years, I increased my contribution beyond that amount, often meeting the annual maximum before year-end.
Whenever I received a raise or promotion, I put that money into an automatic deduction from my paycheck into a credit union savings account.
My husband and I paid extra to the principal each month on our mortgage, thus paying it off in 21 years instead of 30.“
— Maridee Fox*
“My wife and I knew we wanted to move out of state after retirement. We visited various cities years before retirement to determine where we wanted to live. You need to spend time in those locations. Shortly before retirement, we sold our property and took advantage of a short-term rental so we could take our time in finding the right home.”
— Greg Naster*
2. Work with a Financial Planner
A recurring piece of advice from retirees is to work with a financial planner. Here’s why:
Objective Perspective: A financial planner provides a professional view of your financial situation. They can help you understand complex concepts and navigate the maze of retirement options with clarity.
Customized Strategy: Everyone’s retirement needs and goals are unique. A financial planner can tailor a strategy that fits your specific situation, whether it’s managing investments, planning for healthcare costs, or setting up a withdrawal strategy.
Stress Reduction: Planning for retirement can be overwhelming. A professional can help alleviate stress by creating a comprehensive plan and adjusting as needed.
Futureproofing: Retirees often wish they had consulted a financial planner earlier to avoid costly mistakes. A financial planner can help you anticipate future needs and unexpected events, ensuring your plan is robust and adaptable.
“Over the years we attended various KWB seminars to help us understand and prepare for each upcoming step in retirement (social security, Medicare, etc). Seeing KWB’s unique planning software helped us understand how much we can spend each year in retirement and not have to worry if we’ll have enough money when we’re 90. One of the best decisions we’ve made was partnering with Mike and KWB to manage our retirement funds.”
— Maridee Fox*
“I was confused on how to roll over my 401K and lump sum. I knew it needed to be done but didn’t know how. Nor did I know I had an option to keep my 401K with SCE if I wanted. KWB explained this well, so thanks. And it was great to help me make the rollovers.”
“I was confused when to take Social Security. Either early or wait. It was very helpful how Diana and Claire ran that program to help me decide, especially based on my opinion on how long I might live!”
“The biggest question is when the right time is to retire. This is where any potential retiree really should be getting advice from an Advisor like KWB. Using your program really helped map out how our situation looked and when to retire. I'm glad I got out when I did on my terms and no golden boot!”
— Bill Couts*
“Edison Friends, retire when you're ready to retire. Just make sure you take care of business prior to that date. It’s never too late to prepare, but the earlier the better. For us older Edison employees who started back in the day, we have the benefit of the cash balance (pension). Free money if you will as we never had to pay a dime to get that benefit. I made the decision to take the lump sum rather than the annuity as I want full control of my money, especially for my family after I am gone. I was fortunate enough to work at Edison for 44 years. But realized at the end we mean nothing to the company and the day you leave, you are replaced without thought. The separation process from Edison was actually quite smooth. Both EIX Benefits and Human Resources were great to work with and it was a seamless transition including the retiree medical benefits. I have transitioned quite well into retirement and I will say I am fortunate to have my monies in the capable hands of Diana Sailler at KWB Wealth. I rolled over what was allowed at 59 1/2 years of age and moved the rest, including the pension, at the time of my retirement. I have nothing but positive things to say about KWB and Diana as they have been professional and honest over the past 5 years and the preparation they do for you personally is outstanding.”
— Charlie Clifford*
3. Understand Your Expenses
A common piece of advice from retirees is to gain a clear understanding of your future expenses. Budgeting for retirement can be vastly different than budgeting while you’re working. Ensure you account for both essential and non-essential (discretionary) expenses. Consider factors like healthcare costs, travel, hobbies, home remodeling, and helping out children or grandchildren. Knowing your future expenses will help you determine how much you need to save and how to structure your withdrawals. Many retirees expressed the importance of contacting the Benefits Department early on to understand their retiree medical plan options. If you’re close to Medicare age, it’s also essential to understand how the SCE retiree medical plan works with Medicare.
4. Stay Active and Engaged
Retirement isn’t just about financial planning; it’s also about lifestyle. Find activities and hobbies that keep you engaged and fulfilled. Many say now that they’re retired, they wonder how they had time to work! Retirement has allowed them to spend more time doing the things they love.
Approaching retirement with a well-thought-out plan can make the transition smoother and more enjoyable. Listening to the advice of those who have already made the journey, especially regarding the importance of working with a financial planner, can provide valuable guidance. By starting early, understanding your expenses, planning for healthcare costs, and maintaining an adaptable strategy, you’ll be better prepared to embrace the retirement you’ve worked so hard to achieve.
KWB has been helping SCE employees retire for over 25 years. We are well-versed in your retirement plans and options. Whether you’re months or years away from retirement, we can help create a plan for you. Call or email us today to schedule your complimentary consultation.
*These statements are testimonials by clients of the financial professional as of 08/21/2024. The clients have not been paid or received any other compensation for making these statements. As a result, the clients do not receive any material incentives or benefits for providing the testimonial. These views may not be representative of the views of other clients and are not indicative of future performance or success.