Retirement advice can be hard to hear

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(MoneyWatch) I recently received the following reader e-mail:

"Why are you a 'Negative Nelly'? Your columns seem to advocate that everyone never be able to retire and that everyone be on the "carry-out" plan...i.e. instead of being able to retire, [people] should die on the job....that's NOT right. I've heard of quite a few people who wound up on the "carry-out" plan, when they could have retired and enjoyed what remained of their lives. Please temper your columns so that people, who want to retire, are able to do so without any guilt and are able to enjoy life."

I went back to the column in question, called "Why Keep Working?" in which I noted that many older employees work for more than money. In fact, surveys find that 92 percent of those who worked beyond the traditional retirement age of 65 do so because they want "to stay active and involved," and 86 percent say they "enjoyed working." As a result, people should take care in the decision to retire, because once you do retire, it's hard to land another job. While I did not say that people should not retire, I do agree with the e-mailer that people shouldn't feel guilty for retiring. In fact, in my previous career as a financial advisor, I worked hard to help hundreds of clients retire or to have the opportunity to work less.

But making retirement a viable option can mean deferring gratification at some points in your life, or having to make tough decisions in others. The emotions around these choices can be daunting and may even lead people to the wrong conclusions, which is why so many hire financial advisors.

An advisor's role is to help clients understand how they can achieve their financial goals in a manner that is consistent with their risk tolerance levels. By necessity, a dose of real life must enter the equation. Despite all of the best advice provided, sometimes the client will make a different choice. At that point, the advisor must temper what might be most financially prudent with what makes sense, given that the client is going to forge ahead with his or her plan, flaws and all. As one of my clients once put it, "your job is half science and half art." The science part is easy--the numbers are the numbers, but the art of creating a plan that incorporates those numbers with the client's desires is the challenge.

Sometimes the advisor has to be Negative Nelly. There are instances when a client must be told that he shouldn't buy a bigger house, because it would put his retirement planning in jeopardy; or that sending his child to private college would mean an extra few years of work for the parents or a pile of debt for the student; or the decision to retire early may mean assuming the risk of running out of money. The job of a financial advisor, and now as a financial journalist, requires delivering messages that are sometimes difficult to hear.

I am rooting for every single one of you to reach the goals you establish. If you want to bail out and stop working and you can afford to do so, go for it! If you want to keep on working even though you could well afford to retire, do it! Just be clear that in most cases, these are choices that are usually available only when they are preceded by planning. And by its very nature, the planning process often requires someone to play the Negative Nelly role. In the case of this column, I am happy to play that part when the situation calls for it, but I will be the first to turn into Positive Polly when you reach your desired destination.

Distributed by Tribune Media Services, Inc.

[AAnnie52]

Please, please, please give this advice asap to the very young, from their first job. A great time is the first paycheck when they register shock at taxes withheld along with Medicare and Social Security. THAT'S the time to emphasize saving for the future, when they have the advantage of compounding over decades. Start with 8% and bump your savings up 1-2% a year until you hit 15-20%. Fund your Roth IRA first, then a 401K up to the employer match, then liquid savings in 2 accounts, one for everyday expenses, one for a big emergency fund. Don't worry at that point about interest on plain savings. Focus on the best selections in your investments you can. Spread the risk but don't be too conservative when you're 20-something - that's the time to take a flyer with some of your assets. Other than realigning the mix once or twice a year, leave it be. Trading is not saving. Put taxable assets in a tax-exempt account. If you get a bonus, save some, spend some, donate some. Make sure your life, health, home, and working ability are insured. Do the grownup paperwork (wills, power of attorney, health care proxies.) And don't forget to have fun along the way.

[get_down]

Retirement means (finally) I become my own boss - i.e. every day I make my own work schedule whether do outdoor or indoor chores, eat-in or eat-out, watch TV or read a novel...etc. Throughout my 29 years of working tenure, I seldom travel and nowadays I'd like to stay-in-town just in case my number one son and his wife request me to baby-sit their First daughter who happens to be my very First GD. Since my better-half and I live a frugal life, my pension and my Social Security benefit are enough to cover our monthly spending, which means we can pass along our close to 1 mill to our offspring so that they could have a head-start when their retirement comes. Isn't life grand? God bless everyone.

[mostlydisappointed]

Jill makes a good point, as usual, and uses this idiotic email in a postive way to educate us. I wonder if the first thing she thought after reading it was, "Are you kidding me? You don't have to take my advice if you don't like it!! And find someone else to hang your "guilt" on. That's not the business that I'm in."

[bikeboat]

I am sometimes surprised at some of the lame excuses people give for retiring early, especially among those who are on the borderline financially. People, those with borderline savings, need to not give in to their desire to "get out" to quickly. Perhaps a part time job would keep you in a little longer, thus allowing savings and soc. security to build up a little more. Its too bad that our society/employers can not adapt and offer more part time jobs for people.