The best retirement advice? Be flexible

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In revealing audio clips, clients share the unexpected challenges they found in later life — and the financial choices they had to make to adjust.
For Linda Gonzalez, the perfect retirement included a place to work on her ceramics, time to spend with grandchildren and freedom to travel. So she spent modestly and saved steadily from her salary as an executive assistant in Southern California. Then, with the finish line almost in sight, a layoff left her unemployed in her early 60s. "In life," she says, "you never know what's going to happen."
"The true art of preparing for retirement isn't so much about devising rigid plans as gaining the flexibility to bend without breaking," says Cynthia Hutchins, Director of Financial Gerontology at Bank of America Merrill Lynch. "Often people find that they have to make trade-offs or course corrections."

Listen to our conversation

Linda Gonzalez says she has always been a saver, so when she faced divorce and the challenge of retiring alone, she relied on her dad's lessons in independence from her youth. Click to hear part of our phone interview.
Click to hear part of our phone interview with Linda Gonzalez
"No matter when they happen in your life, things like a layoff or an illness in the family can cause you to rethink your retirement plans. The most important thing is to look at various scenarios and have a contingency plan for each one," says Hutchins. "Starting early to create these plans can help you keep your retirement strategy on track."
Preparing for retirement isn't so much about devising rigid plans as gaining the flexibility to bend without breaking. Often people find they have to make trade-offs.
— Cynthia Hutchins,
Director of Financial Gerontology at
Bank of America Merrill Lynch

Recovering after a layoff

Instead of panicking when her pink slip arrived, Gonzalez considered her options. After two divorces, she'd long-ago dropped the idea of retiring with a spouse and had been feeling emotionally and financially ready for a solo retirement.
"I was determined not to touch my retirement savings," she recalls. Unemployment insurance, severance and emergency savings met her basic expenses. She lived frugally, avoided credit card debt and continued driving her aging car. When she landed a job 18 months later, she made up for lost income by working for three years past age 65, the traditional retirement age.
While working a few extra years is a course correction that many people find necessary, Hutchins says, others don't have that choice.

A health crisis can change everything

For those approaching retirement age, sudden health changes are one of the most common disruptors — and one that most people have a difficult time anticipating. That was the case for Sue and Dennis Zuber.
As they entered their late 50s, Dennis was finishing his doctoral program and Sue was working full-time. They planned to ramp up their retirement savings after several years of getting by on Sue's income. Then Dennis, a college professor, came down with an illness that forced him to stop working. Suddenly, "We were down to one income," says Sue, a compliance specialist. "It absolutely changed our lives and retirement plans."
Working with a Merrill Edge Financial Solutions Advisor, the Zubers consolidated retirement plans from a number of past jobs into a single account. Noting that their money was primarily in cash and that their main concern was having enough money to live comfortably in retirement, their advisor suggested the Zubers invest in a diverse mix of stocks and bonds to give their savings the potential to grow. While this recommendation might not be right for everyone, working with their advisor, they were able to create a portfolio that suited their risk tolerance, liquidity needs and timelines.
While life still feels full of uncertainties, rethinking their finances has given the Zubers a sense of clarity. Sue says, "It really helped to sit down face-to-face and talk with somebody."
As the Zubers discovered, no matter how healthy you and your loved ones feel today, things can change — and quickly. The key is to think ahead so you don't get blindsided, says Ben Storey, Director of Retirement & Personal Wealth Solutions at Bank of America Merrill Lynch. "A lot of people realize the importance of having their homes insured, but they don't consider long-term care insurance. They have an easier time anticipating that a tree may fall on their house than imagining that they may be stricken with a long-term illness someday."
Think about what you absolutely must cover. Only then can you think about things you would love but if they don't materialize, it's not the end of the world.
— Ben Storey,
Director of Retirement & Personal Wealth Solutions at
Bank of America Merrill Lynch

Listen to our conversation

When unexpected health issues forced Dennis Zuber to retire early, his wife Sue says the budgeting skills she learned as a stay-at-home mom helped them manage. Click to hear part of our phone interview.
Click to hear part of our phone interview with Sue Zuber

When your family needs you

About the time Linda Gonzalez was settling into retirement, life brought yet another change. Her mother, in her 90s, came to live with her in Los Angeles. Though Linda cherished the opportunity to help her mom through her last years, until her death in early 2017, having a housemate meant putting some of her travel dreams on hold — and working with a Merrill Edge Financial Solutions Advisor to come up with a plan to cover her mother's expenses. She invested the proceeds from the sale of her mother's Arizona home into a conservative investment portfolio that was designed to produce a stream of income for them.
The Zubers also found themselves juggling family priorities and retirement goals, choosing to put off saving seriously for their retirement while they were helping their children through college. "Another goal we had for ourselves was paying down debt. You just can't do it all," recalls Sue Zuber. But their advisor helped them figure out how to ramp up investing for retirement while still chipping away at debt. They were also able to provide some financial assistance for their children's education expenses.
Such choices are an inevitable part of navigating life's zigzags, notes Storey, and you may need to periodically recheck your finances. "It's important to break things down, really think about what you absolutely must cover: things like health care costs, housing and how you're going to keep the lights on," Storey says. "Only then can you think about things that you would love, but if they don't materialize, it's not the end of the world."

More days to enjoy — and look forward to

In 2013, Joseph Coughlin, director of the AgeLab at Massachusetts Institute of Technology (MIT) and the author of The Longevity Economy, asked 200 long-ago MIT graduates (average age: 79) about their biggest retirement surprise. Instead of stock responses about life hurrying by, "the overwhelming answer was that retirement is a lot longer than you anticipate," Coughlin recalls. "These retirees emphasized that they were actually surprised how much time they had."
The biggest retirement surprise, according to an MIT survey? "Retirement is a lot longer than you anticipate. These retirees were surprised how much time they had."
— Joseph Coughlin,
Director of the AgeLab at MIT
Linda Gonzalez expects that, like her mother, she too may live well into her 90s — with a retirement that stretches as long as 30 years. And she knows just how she wants to spend her time. Though the path was a little different than she anticipated, she's made her retirement dreams come true, converting part of her garage into a ceramics studio, visiting her grandchildren in Florida and thinking about places she wants to visit. She also knows that the years ahead will certainly bring new surprises. And that's just fine, she says.
For their part, after Dennis's health scare, the Zubers' biggest priority is spending as much time as possible with their family. "We are thankful that we have what we have and are in a better financial position going forward," says Sue.
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