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Retirement expert details the ‘highest single correlation’ to success

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The key to a successful transition into retirement lies with several tactics, and preparation — both financial and non-financial — is among the most significant, according to one expert.

“The highest single correlation to that success is how much time you spend preparing prior to retirement — not only on the financial elements, which is obvious, and everybody does it, but not as obvious is the non-financial side,” said 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 Retirement Manifesto blog, the more time spent planning for both sides of retirement, the higher the chances that “you’ll find those things in retirement that will bring you the sense of fulfillment that you’re hoping to have in retirement.”

Many prospective retirees don’t start thinking about their post-retirement plans until after they’ve left the workforce. Gilbert, however, took a different approach, beginning his planning years in advance — a move he credits as instrumental to his success.

“It certainly helps,” he said. “It’s been demonstrated that the more you do in advance in terms of this planning, the smoother that transition will be.”

In order for retirees to ensure they have enough money to maintain their desired lifestyle, Gilbert recommended tracking spending before even entering retirement.

“You can’t go into retirement without having a good baseline of spending,” he said. “It’s a math problem, ultimately. And the more variables that 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 adjusted for retirement by accounting for downsizing, travel, and other changes. He also used tools like the 4% rule (spending 4% of your portfolio annually) as a guide.

“See how it compares to that estimated spending number,” he said, noting that if it’s close, you should be fine. But if it’s not close, you’ll need to consider working longer or cutting expenses.

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



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