Five Ways to Make Retirement a Little Less Scary
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To avoid lying awake at night once you’re retired, consider having these strategies in place before you take the plunge.
On July 10, 2023, I walked out of my old office for the last time. Upon my departure, I gave up a lot of my identity. I spent eight years with the firm and was one of four owners. I lost some relationships. No, I didn’t lose friends or leave on bad terms, but I walked away from the thing that connected us and the daily social interaction it facilitated. I said goodbye to the daily structure.
And, oh yeah, I gave up a nice paycheck. No matter how much money you have in the bank, how well prepared you may be, that’s scary. And while I wasn’t retiring, almost every retiree faces these same challenges.
Below are a few strategies to help you sleep better at night in your first few years of retirement.
1. Retire “to” not “from.”
I drove from my old office to my new one. I didn’t stop at home. I didn’t stop for coffee. I don’t even think I listened to the radio. And I wouldn’t advise this. I encourage my clients to take some time to breathe. Do the home projects you’ve been putting off for 30 years. Spend time with your grandkids. Take that trip.
When I arrived at my new office, I had my new identity, much the same as my old. Professionally, I am a financial planner, an owner and an entrepreneur. The gig economy has made it much easier to work when you want, how you want, in the industry you are passionate about. The most important thing about retiring “to” something is that you know who you are. Remember: “Retired” says only what you don’t do. Make sure you know what you do do.
Now, I know you’re asking, “How does this make things less scary?” Two reasons. First, being busy inherently reduces stress. Second, many of the things that people retire to pay something. Probably not what you’re used to, but they take stress off your portfolio, and your shoulders, between retirement and Social Security.
2. Cash is king.
Not in an investment sense and not forever. I often encourage retirees to have a year’s worth of expected expenses in the bank, including any one-time, big-ticket items. That’s much more than the three to six months you’d read about in a personal finance textbook.
It’s really uncomfortable to watch your checking account deplete without the bi-weekly refills. One strategy that may help is to hold that year’s worth of expenses in a savings or money market account that deposits the exact amount of your old paycheck into your checking account every two weeks.
3. Have a financial plan.
Think of your financial plan as your gas gauge. It will tell you how far you can go without running out. Ideally, you have many more miles than you plan to drive. A proper financial plan will also address cash flow, risk management, investments and estate and tax planning.
However, the core thing you want your financial plan to tell you is this: “You’re going to be OK.” That will certainly help you sleep at night.
If you want reaffirmation of your plan, you can check your numbers for free here.
4. Have an appropriate asset allocation.
Your investments are the actual gas in the tank. Cerulli Associates and other financial firms have long documented the difference between “investment” returns and “investor” returns. The latter typically are much lower than the former because we are human beings. We buy at highs and sell at lows. Vanguard’s Advisor’s Alpha study highlighted behavioral coaching as the most valuable service financial advisers provide.
Much of this panic selling is due to having a portfolio that made much more sense in your 30s than it does in your 60s. Weekly, I come across Baby Boomers who have more risk in their portfolio than I do. I am 37. A subsequent article will serve as a guide to find your appropriate asset allocation. In the meantime, you can use this free tool to gauge how much risk you’re comfortable with.
5. Have an income plan.
Throughout your working career, if you’re an employee, you have an income plan. It’s your paycheck, and it’s probably as steady as your job. In the last 15 years, I can count on my two hands the number of pre-retirees who have an income plan for the next chapter.
The financial plan tells you how much you can spend every year. The income plan tells you where it’s going to come from every month. When I started my own firm, I knew that I had two years of runway, literally making no money, before I would run out. My financial plan told me that. Where I would draw excess money for expenses was part of my income plan. Fortunately, things ramped up quickly, and there were only a few months where this was necessary, but the fact that I had a plan meant I could sleep soundly.
Credit: Kiplinger.com
When a “Good Year” Still Feels Tight You finally have a year where sales are up and the books show a profit—yet your bank account feels like it missed the memo. You’re working harder than ever, but cash seems to disappear the moment it hits your account. If that sounds familiar, you’re not doing anything wrong—you’re just bumping into one of the most common challenges in business: confusing profit with cash flow. Profit tells you how your business looks on paper.
Cash flow shows how your business feels in real life. And while both matter, only one pays the bills. The Real-World Disconnect Here’s where the confusion usually starts: You invoice a client for $20,000 in December. On your profit and loss statement, that sale boosts your year-end numbers. But if the client doesn’t pay until February, that profit doesn’t do much to help you cover January’s rent, payroll, or taxes. Or imagine a landscaping company that buys $15,000 of equipment in spring to prepare for summer jobs. On paper, the expense is spread out over time—but in reality, that cash leaves your account today. The result? You’re profitable on paper but short on cash in practice. Why This Happens to So Many Business Owners Cash flow issues aren’t a sign of failure—they’re often a natural part of growth. When your business scales, so do your expenses, payment cycles, and timing gaps between money in and money out. The biggest triggers include: Delayed payments: Clients pay on their schedule, not yours.
Seasonal swings: Slow months still have fixed costs.
Inventory or supply purchases: You pay upfront, earn later.
Tax surprises: Profit may be taxable long before the cash arrives.
Without planning for those timing gaps, even healthy businesses can feel like they’re running on empty. Turning Chaos Into Control This is where working with a trusted financial professional can make all the difference. They can help you: Forecast cash flow so you see slowdowns before they happen.
Smooth out seasonality by building cash reserves during strong months.
Review expenses strategically to make sure growth doesn’t outpace available cash.
Even simple steps—like syncing invoicing and bill-paying schedules or setting aside a percentage of each payment for future expenses—can dramatically reduce stress and improve stability. Bottom Line Profit is your scoreboard. Cash flow is your oxygen.
You need both to survive—and thrive. If your business feels profitable on paper but tight in the bank, you’re not alone. Contact our firm today for guidance on building a cash flow plan that keeps your business strong through every season.
Considering bringing on a partner? While there are certainly benefits you want to make sure you consider all aspects of such a relationship and look to the long term. Here are five of the best reasons (Pro’s) to organize a business as a partnership, explained in practical, plainEnglish terms: THE PRO’S 1. Shared Capital and Resources A partnership allows multiple owners to pool money, assets, and resources, making it easier to start or grow a business than going alone. Partners can contribute cash, equipment, property, or intellectual property Reduces the financial burden and risk on any one individual Often improves credibility with lenders and suppliers 2. Complementary Skills and Expertise Partners can bring different strengths and experience to the business. One partner may excel at operations, another at sales or finance Better decisionmaking through multiple perspectives Division of labor increases efficiency and focus This is especially valuable in professional services, startups, and small businesses. 3. Simple and Flexible Structure Partnerships are generally easy to form and operate compared to corporations. Fewer formalities and lower startup costs Minimal ongoing compliance requirements Partnership agreements can be customized to fit the owners’ needs Assets can be moved in and out of the partnership with little or no tax implications. This flexibility allows partners to define roles, profit sharing, and management however they choose. 4. Pass Through Taxation Most partnerships benefit from passthrough taxation, meaning: The partnership itself does not pay federal income tax Profits and losses pass directly on to the partners’ personal tax returns Avoids the “double taxation” faced by many corporations This can simplify tax reporting and, in some cases, reduce the overall tax burden. 5. Shared Risk and Responsibility Running a business involves uncertainty, and partnerships help spread risk. Financial losses are shared according to the partnership agreement Emotional and operational pressure is divided among partners Partners can support each other during difficult periods For many entrepreneurs, not having to shoulder everything alone is a major advantage. THE CON’S Here are five of the strongest reasons not (Con’s) to organize a business as a partnership, especially when compared with an LLC or corporation: 1. Unlimited Personal Liability In a general partnership, each partner is personally liable for the business’s debts and obligations. Personal assets (home, savings, investments) can be seized to satisfy business debts Each partner can be held liable for the actions of other partners One partner’s mistake or lawsuit can financially harm everyone Organizing as a Limited Liability Company (LLC) partnership would limit or may eliminate this personal liability. This is often cited as the single biggest drawback of partnerships. 2. Joint and Several Liability for Partner Actions Each partner acts as an agent of the partnership. One partner can legally bind the business without the others’ consent Poor decisions, negligence, or misconduct by one partner affect all partners Disputes with vendors or customers can expose every partner to risk Even highly trusted partners can unintentionally create legal exposure. 3. Potential for Conflict and Management Disputes Partnerships often fail due to internal disagreements, not business performance. Differences in work ethic, vision, or priorities can cause tension Decisionmaking authority may be unclear or contested Resolving disputes can be costly and disruptive Without a strong partnership agreement, disagreements can quickly escalate. 4. Limited Continuity and Stability Most partnerships lack perpetual existence. The partnership may automatically dissolve if a partner leaves, retires, becomes disabled, or dies Ownership transfers are often restricted or complicated Investors and lenders may view partnerships as less stable This can make longterm planning and growth more difficult. 5. Harder to Raise Capital and Attract Investors Partnerships are often less attractive to outside investors. No easily transferable ownership interests like corporate stock Investors may avoid exposure to partnership liability Growth options are more limited compared to LLCs or corporations As a result, partnerships can struggle to scale beyond a certain size. The Agreement A key factor in any successful partnership is its operating/partnership agreement. A good agreement will lay out specific information, purpose, requirements, expectations, responsibilities, how much capital is to be raised and by whom, allocations of profits, losses and distributions, duties and obligations of the partners to the partnership and each other, possible compensation, how new partners are let in and how partners are allowed to withdrawal. You must also consider possible issues that may happen and have a contingency plan to address such things as; how partnership interests are handled, dissolution of the partnership, dispute amongst partners resolution and other items must be addressed in the agreement should a problem arise. Such an agreement can be a very complex document due to all the things that should be addressed so consulting an attorney knowledgeable in partnership law is crucial. Each state has its own requirements thus the attorney needs to make sure the agreement will comply. Also, the IRS itself has things which it wants to see in the agreement. Before any operating/partnership agreement is signed, it should be reviewed by an attorney, each of the partners and a tax professional to see that it is in compliance with all rules and regulations and the partners, themselves, agreed to be bound by it. Before you make the final decision on whether a partnership structure is right for you and your business associates, sit down with a tax professional and an attorney to discuss each of these good and bad reasons. Looking for a financial partnership that thrives on building strong relationships with their clients? Call Steven Brewer today at 812-883-6938 to schedule an appointment. Accountability and results in growing your business.
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