Retirement Planning Tip: Try A Six Month Drawdown Instead Of Monthly – Forbes

Find your retirement rhythm so you can expect regular payments and enjoy all that retirement has to … [+] offer. (Photo by Tim Graham)

Tim Graham/Getty Images

We are creatures of habit, especially when it comes to finances. Even looking back at your first allowance, likely that you received it on a regularly scheduled day of the week or month. The same goes for your first paycheck every two weeks: your car payment, the 15th of the month. Your rent or mortgage is due on the first of the month. And nowadays, we don’t even need to send a check; these payments are just automatically deposited or withdrawn on a regular monthly schedule.

A regular schedule makes most people happy. The comfort of knowing what to expect financially is a critical factor to our happiness. Then comes retirement.

A Healthy Financial Balance Starts With An Advisor

The day you have been working towards finally arrives. You no longer need alarm clocks, have deadlines, or regularly deposited paychecks. Our habits seem to change overnight. Especially our spending habits. Often with change comes uncertainty, even fear. Patience, grasshopper, it took you your entire life to reach this milestone and finding your financial rhythm in retirement takes time too.

To live happily on your life savings, it is wise for you to work with your financial advisor who has your best interests in mind. A trusted fiduciary is someone who will help you find the right cadence for your future withdrawals and deposits. Hopefully, by the time you retire, you have built a lifelong partnership with your wealth manager. This financial expert should know what makes you happy and how much money is needed to achieve your peace of mind.  

Allocating Wealth To Achieve Happiness

With any change, there is a learning curve. Knowing there will be a transition period will help relieve the uncertainty of your newly found freedom. How a person spends their money differs according to their passions, annual events, health, and sometimes unexpected expenses. So please don’t rely on what your friends or family did in their retirement. Turn to your financial advisor as this person will work with you to allocate your funds, whether they be savings, investments, or other sources of wealth.

The pace at which you spend your money is determined by the things you and your financial advisor have discussed over the years. By considering these factors, there are several roads to travel. The best way to find your financial road map for retirement is to have your wealth dispersed in some regular pattern that fits your lifelong dreams. After all, we are creatures of habit.

Retirement Payment Options

One option for many new retirees is a monthly deposit since most people are used to it when working. Other possible payments are semi-annual deposits – every six months – or even one annual payment. The goal is to find the frequency that works best for you.

Most often, the six-month allocation is preferred as our living expenses are not as linear in retirement as they were when working. The freedoms of retirement reveal themselves in the absence of a schedule – a time when spontaneity outweighs routine. Enjoy the unknown – take that unexpected road trip – you worked hard for it! It just means that when you return home, you might want to spend less until you get a handle on managing your irregular budget.      

The Benefits Of Six Month Installments

The six-month cadence has many advantages. For one, it takes into consideration the certainty of market volatility. This bi-annual allocation allows your financial advisor to manage your portfolio with more ease and less kneejerk decision-making.

The six-month cash reserve also helps manage unnecessary stressors that your lifelong financial partner is there to handle. After all, the goal of retiring is to do so in happiness and health.

Lastly, a bi-annual distribution of wealth allows for easier recalibration. These longer timeframes give a wealth manager an accurate picture of how you spend your money and budgeting correctly. If you notice a pattern of calling your financial advisor every four months, then most likely, a discussion is needed to assess if your retirement lifestyle is sustainable.

The proper drawdown cadence in retirement gives you the freedom to enjoy your retirement in wealth, … [+] health and happiness. (Photo by Gideon Mendel/Corbis)

Corbis via Getty Images

The Goal Is To Retire Happily

Financial advisors want their clients to retire with wealth, health, and happiness. If you find that your six-month payment lasts eight months or longer, perhaps it means you can live with more freedoms than you ever imagined! What a gift to see that your hard work paid dividends and that your dreams of traveling the world or buying that lake home are a reality.

Lifelong Dreams Do Come True

We all like a happy ending. Your financial advisor is your lifelong partner for helping you make investment choices that afford you the happiness you so richly deserve. So, as you start to consider how you want to spend your golden years, think about what truly makes you happy and healthy. Wealth is far more than what is in your retirement savings; it is also what is in your heart. A wealth manager with whom you are fully transparent is best able to set your sails true north.