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Pension expert describes the ‘highest correlation’ with success

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The key to a successful transition to retirement lies in several tactics, and preparation – both financial and non-financial – is among the most important, according to one expert.

“The highest correlation to that success is the amount of time you spend preparing for retirement – ​​not just the financial elements, which is obvious, and everyone does it, but not so obvious is the -financial side,” says Fritz Gilbert. , author of “The Keys to a Successful Retirement” and guest on a recent episode of Yahoo Finance’s Decoding Retirement.

According to Gilbert, who also publishes the blog Retirement Manifesto, the more time you spend planning both sides of your retirement, the more likely it is that “you’ll find those things in retirement that will give you a sense of fulfillment.” give what you hope for. retire.”

Many future retirees only start thinking about their post-retirement plans after they leave the workforce. However, Gilbert took a different approach and started his planning years in advance – a step he believes is key to his success.

“It definitely helps,” he said. “It has been shown that the more you do in advance of this planning, the smoother the transition will be.”

To ensure retirees have enough money to maintain their desired lifestyle, Gilbert recommended tracking expenses before even retiring.

“You can’t retire without a good basis for your expenses,” he said. ‘It is ultimately a mathematical problem. And the more variables you can eliminate, the better your plan will be.”

Read more: Retirement planning: a step-by-step guide

According to Boston College’s National Retirement Risk Index, 39% of working-age households will not be able to maintain their standard of living in retirement.

In Gilbert’s case, he and his wife tracked every expense for 11 months to establish a baseline and then adjust for retirement by accounting for downsizing, travel and other changes. He also used tools such as the 4% rule (spend 4% of your portfolio annually) as a guideline.

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“See how it compares to that estimated spending figure,” he said, noting that if it’s close, all should be good. But if it’s not close, you should consider working longer or cutting costs.

Gilbert also recommended his “90/10 rule.” Before retiring, the self-described spreadsheet nerd said he spent 90% of his time thinking about money and only 10% of his time on the non-financial side of retirement.

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