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Test Drive Your Retirement Plan

Two emotions are common for those who are nearing retirement – excitement and fear. Leaving the working world behind can feel empowering, however, apprehension about entering a new life stage may also creep in. If you’re nearing retirement, you’ve likely taken steps to prepare financially for the future. But there’s one important thing you might not have considered adding to your pre-retirement checklist – a practice run. Test driving aspects of your plan before you’re actually in retirement can help provide a sense of security for this next phase of life.

Consider what an ideal retirement looks like in the long term. How you choose to spend your time (and in many cases, your money) in retirement is your decision to make, but it’s not always an easy one. As we age, our interests, hobbies and relationships change. What you may consider your “ideal” retirement when you’re 55 may not be the same as when you’re 65. This evolution can make it hard to plan accurately for retirement. Consider sitting down with your spouse or family members to explore how aging and future milestones may alter your retirement. Your financial advisor can

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help you make a plan that aligns your ideal retirement with your financial situation.

Test drive your retirement lifestyle. Many people pledge a significant amount of savings towards a particular lifestyle in retirement. This could be a home in another part of the country, a timeshare or a trip abroad every year. Problems can arise if you have cemented a financial commitment to a certain lifestyle but change your mind down the road. It’s natural to change your mind about what you want, but it’s better to understand the potential implications of

altering your plan before you actually retire.

For example, those who have based their financial plan for retirement on the idea that they will be living in a new location may benefit from a practice run before making the big move. Consider an individual who has lived their entire life in New York, but moves to Florida when they retire – where taxes and cost-of-living are generally lower. Deciding after several years to relocate back to New York to be near family – where cost of living and tax rates differ – can mean savings may not go as far as planned. Be prudent and build some flexibility into your plan to avoid unintended consequences.

Simulate your retirement expenses. Practice can also be beneficial in another way – simulating how to manage your expenses in retirement.

The idea that your cash flow no longer comes from a reliable paycheck, but from other sources like Social Security and personal savings can come as a shock – even to those who are well prepared for this change.

(although car payments can certainly happen again in retirement), college costs for your kids and contributions to retirement plans. Keeping these two separate accounts will help you more appropriately plan for and quantify your expenses in retirement.

The best way to get a handle on these expenses is to experience them while you’re still working. Take that trip to Europe before retirement and find out first-hand what you can do within your budget. If the cost is different than expected, make adjustments to your financial projections to more accurately reflect reality.

Perfecting life in retirement. A little practice can go a long way toward easing emotional and financial concerns when it comes to making the jump into retirement. Consider working with a financial advisor who can help you determine a budget and a retirement income plan that fits your needs and desires.

One idea to accomplish a sense of financial security is to run two accounts for a certain period of time. Through one account, manage all of your household and lifestyle expenses that you expect during retirement. This includes the costs for necessities like food, clothing, shelter, utilities, taxes and insurance as well as “nice- tohave” items like dining out, traveling, etc. Keep in mind that you may have to estimate or inflate your lifestyle expenses for retirement as they could rise when you have more free time. Through the second account, manage all of your expenses that are expected to end in retirement like principal and interest on a mortgage payment (if your home will be paid off), current car payments

Duane J Lusson, CFP, ChFC, CLU, MSFS, is a Private Wealth Advisor with Ameriprise Financial Services, Inc. in Ottumwa, Iowa. He specializes in fee-based financial planning and asset management strategies and has been in practice for 33 years. To contact him, call 641-684-4200 or stop by his office at 527 W. Second in Ottumwa, Iowa.

Investment products are not insured by the FDIC, NCUA or any federal agency, are not deposits or obligations of, or guaranteed by any financial institution, and involve investment risks including possible loss of principal and fluctuation in value.

Ameriprise Financial, Inc. and its affiliates do not offer tax or legal advice. Consumers should consult with their tax advisor or attorney regarding their specific situation. Ameriprise Financial cannot guarantee future financial results.

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A Northwoods Weekend

Man, what a full weekend it turned out to be. It all started with a murder mystery in the neighborhood!

I was tired and went to bed early on Friday. Nova, woke me. “Seriously, Nova,” I said, “You can’t wait until it’s time to get up?” I looked at my cell phone. “Good grief, it’s 1 in the morning.” To wait another 5 or 6 hours was too much to ask. I grumbled and complained, but drug myself out of bed. I grabbed my coat, a flashlight, and Nova’s leash. Walking out the front door, I warned my canine, “There will be no sniffing around. Do you hear me? Go out, go potty, and we’re coming right back inside.” For once, my dog listened to me; she was quick about her business.

We were expecting a good amount of snow Saturday around noon, and I had several things I wanted to get done outside before the snow fell. Plus, my daughter and granddaughters were coming to visit for the weekend. I double checked to assure the alarm was set.

As I fumbled with the phone, I noticed I missed a message

at 11:15 Friday night, from my neighbor, Troy. “I hope everything is okay,” I said as I opened his text: ‘Not sure if you’re still awake... This was just on the road by our driveway. A big owl carrying a dead owl.’ Wow. He sent a couple of photos along with his message.

Even though I was very tired, I looked at Troy’s photos several times. Without my glasses, both large birds appeared to be great gray owls. I laid awake thinking about this situation, analyzing, what could have happened, until I finally fell asleep.

I woke again a couple hours later, wondering why an owl would be carrying another dead owl? Are owls cannibals? I began researching and discovered great gray owls are monogamous; they keep the same mate for life. Maybe their relationship was troubled. Surely this owl did not do the unimaginable! Troy’s photos may have been from a possible crime scene. I forced myself to give the living owl the benefit of the doubt.

I felt sorry for both owls; the deceased owl because, well it was dead, and I felt sorry for the living owl, too. Was the owl standing guard over the body of his lost partner? Since the owls were near a driveway, I felt like the deceased did not die of natural causes. This was really concerning and I suspected foul play. I wanted to read and research more, but I had to get up early and I needed some sleep. I dreamed about owls.

My alarm sounded at 6:30. “Come on, Nova,” I said after hitting the snooze only one time. “We need to get up. We have a lot to do this morning and the kids will be here around noon.” I put on my coat, leashed Nova Mae, and we went for our morning walk. I could see some type of debris in the road, about a hundred yards to the west of my driveway, right near the end of Troy’s driveway; the scene of the crime from the previous evening.

It was a crisp morning, with no wind. As Nova and I got closer we found the debris to be owl feathers. They were scattered from one side of the road to the other, in an area about 25 feet

wide. The strange part is that it was only feathers – no sign of the owl’s body at all. With no wind, how did the feathers from one bird get scattered in such a big area? What could have done this? A wolf, or a or a pack of coyotes? It’s hard to say. Nova and I continued out walk to the

end of the street. …serenity of fresh snow…another crime scene…a sole chickadee…

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Dog Gone

A couple of months ago I told the story of Jag’s new propensity to go to Damon’s house whenever he had the chance. We are not sure why this has become his new fascination but every day, either I would go over to Damon’s and pick him up or Damon or Zane would bring him home. He was always happy to be home in his warm bed in the garage and to have a meal. The next morning, rested and full, he would be ready to make the trip again. If it was getting dark, Jag was content to stay home. Being a terrier, he has traits that are both endearing and frustrating. He is stubborn and smart as well as thinking he is the toughest animal around. I have done everything I can think of to keep him home. I have tried keeping him in the garage and walking him on a leash when he needs to go out. This was frustrating to both of us as he does not like a leash, and he wanted to go outside constantly. If I let him run loose, he would come back when called, most of the time. Occasionally,

it was though he had suddenly become deaf and could not hear me calling him back. He would take off making the long trip over the hills and through the woods. There were days he was brought back more than once only to return to Damon’s. His trips became so constant that I even thought about tying him up. After consideration, I decided against this. He has run free his entire life and absolutely hates to be tied. I thought it would be better to let whatever happens, happen rather than torture the old man.

In all the years we have had him, Jag has served as a watch dog, keeping wildlife out of the yard. With no limits to his courage, he will attack a raccoon or opossum without hesitation. He has realized he can not catch a deer so doesn’t bother to chase them but will bark enough to get them out of his yard. He is not the greatest hunting dog but loves to hunt anyway. If I have a gun, he will take off running in front of me, convinced I am going to shoot something for him. He is also convinced I never miss, which occasionally leads to disappointment on his part. He can track a rabbit but usually tracks it to where it has been rather than where it is going. This is not very productive.

One evening last week, I let Jag and

Billie out before we went to bed. As usual, Billie was back in about five minutes, but Jag was not with him. I waited a while and checked again but Jag was still not back. Since it was an unusually warm winter evening, I thought Jag may have changed his routine and decided to travel to Damon’s for an evening visit though it was unlike him to miss a meal or travel at night.

The next morning, I texted Damon to see if Jag was there. He had not seen him but if a person is not looking for a black dog in the pre-dawn darkness in the early morning hours, it would be easy to overlook him. That afternoon when I got done with work, I drove by Damon’s to pick up Jag. He was not there, which I found quite concerning. He has been known to meet up with his buddy Claire, Damon’s terrier, and the two of them go hunting. This was not the case as Claire greeted me when I pulled in the driveway. There are several things that live in the woods that would do a little dog harm and Jag is not afraid of any of them. I think his wanderlust and courage may have become his undoing. We have not seen a trace of him since he last decided to make the trip across the farm. I am afraid the little old dog is gone.