Crucial Steps for the “Pre-Go” Years Before Retirement

**Robert Brokamp** (0:02)
What you should be doing right before and as you enter retirement. This week on the Saturday Personal Finance Edition of the Motley Fool Hidden Gems Investing Podcast.
I'm Robert Brokamp, and you know, retirement is the number one financial goal for most people. We spend years squirreling away money, so we eventually hope to live off it. What should we be doing as we get closer to the big day? Well, here to provide some suggestions is Dana Ahnsbach. Who has been a financial planner since 1995, and is the CEO and founder of Sensible Money, a fee only planning firm in Arizona. She's also the author of three books, including her latest, Living Off Your Acorns, Your Guide to the Four Phases of Retirement. Dana, welcome to the show.

**Dana Anspach** (0:47)
Great to be here. It's my first time on this podcast. I'm excited.

**Robert Brokamp** (0:51)
Well, we're excited to have you, and you talk about four phases in your book. I think most people have probably heard of three of those phases, the go-go years, lo-go years, the no-go years, terms that come from a 1998 book by Michael Stein. But in your book, you added the pre-go years, which you believe can actually be the most important.
When do the pre-go years begin and what makes this time period so crucial when it comes to retirement planning?

**Dana Anspach** (1:17)
I think the pre-go years begin about 10 years before retirement, or whenever you really get serious about, wow, I'm going to retire one day. And for some people, that doesn't happen until the year before retirement, or until they get a layoff notice. It's not the way we want it to happen. I'm lucky being in this profession that I think about these things more. And for me, my pre-go years began about two years ago at the age of 53, where I really suddenly connected emotionally to the idea that I was going to really retire one day.
I'm a self-professed workaholic. I love what I do. I'm very lucky. But for me, that idea of retirement, even though I do retirement planning for a living, just I thought, not for me, right? That's just not for me. And that has shifted dramatically over the last two years because of this awakening, this idea that, wow, I'm in those pre-go years. I'm starting to talk about and think about these four phases of retirement, connect more with them. Other people may connect with the idea of retirement more strongly, but not have the financials in order. And I talk about the importance of both. You have to have the emotional connection and the finances. I had the finances. No emotional connection.
You know, if you have the emotional connection, then that 10 years prior, that's when you really need to get your finances in order and make sure what you want to do is feasible.

**Robert Brokamp** (2:46)
I think one of the trickiest aspects of this, and perhaps one of the least appreciated aspects, is that workers in general aren't actually that good about predicting when they will retire. And you kind of touched on that. And I think some studies show that the difference is about three years. But, you know, some people retire sooner because they maybe made that emotional connection and they had enough money. Might be they didn't have a choice. They got laid off for health issues, either their own or their spouses.
So do you think that everyone should plan on retiring sooner than they probably expect?

**Dana Anspach** (3:18)
I love that idea from the financial planning perspective.
So when we have someone who isn't sure about their retirement date, we like to align both the plan and the portfolio as if they do retire a few years earlier.
Some people reach financial independence and decide they enjoy what they do. And, you know, they're going to keep doing it as long as that enjoyment is there. And so they may work longer. But you're going to be much better off if you've planned for an earlier retirement than if you are caught off guard and expecting those last few years of savings to get you over the hurdle of where you need to be. Or if you simply didn't plan ahead and you're caught off guard because, oh my gosh, you know, I thought I was going to have five more years. I wasn't really going to think about it until the year before retirement. Suddenly here I am having to make these readjustments very quickly.
That's not a great place to be. And the research also shows that when retirement is forced upon you, people have more trouble adapting, more trouble figuring out that next step of how to be happy and find purpose in retirement. So there's some work there on the emotional side that has to be done when these events occur. I think of it as instead of, oh my gosh, can't believe this happened to me, being realistic about this could easily happen to me. I could be out of work at 60 or 62 or 65 if I'd been planning to work till 70