Retirement Requires a Shift in Mindset: Are You Ready for That?
When you're saving for retirement, your focus is on growth, but once you retire, the focus needs to shift to income, which is a tough adjustment for many. What to do?

When it comes to investing and retirement planning, it can be quite the conundrum trying to invest for the long term while simultaneously trying to solve for income in retirement.
When it comes to retirement planning, one should take priority over the other, considering that it is possible to retire without growth, but it is impossible to succeed without income. This is the challenge for many people preparing for retirement who have a propensity to remain in familiar territory focused on growth.
Investing for long-term growth is what most investors understand, it is familiar and is what they have been doing for years inside of their retirement accounts, but retirement is different because it requires a shift from growth to income, and that is new territory for most people.

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A shift in mindset is needed because when employed, you’re trading time for money, but in retirement you’re trading money for time, which is an entirely different process.
Unless you have a lifestyle that is funded entirely by Social Security or a pension, when evaluating retirement needs, you will likely find an income gap. To fill that gap, you will find it necessary to develop a new income source to replace the loss of employment income.
This transition is where some investors struggle because so often people want to have this major life change of retirement, but they want to do it without making a shift in how they view their assets. It is like a person getting married but not wanting to give up the single life...it most likely isn’t going to work.
When you invest long term, it means you do not need to withdraw money from your assets for a long time. However, if your need for retirement income is upon you, your timeline has moved from the future to the present, which translates to finding a different approach.
When everything begins to fall into place
I find that once people understand that a mindset shift must occur before any significant progress can be made, the process becomes easier, and everything begins to fall into place. As with anything, it is difficult to find a solution to a problem you don’t understand.
At its core, retirement planning is a discovery process to learn whether you have an income gap. It boils down to finding a single number that you need to solve for, and once that’s discovered, everything is about replacing that income. Without this number, everything else is a guessing game that seldom results in having a viable long-term plan that you have confidence in. You can shortcut this step and perform some mental math with round estimates and assumptions, but this only compounds the problem downstream, making things more difficult.
Taking the time to calculate precisely what is needed can help make it easier for everything else to fall into place. It then becomes a process of generating the income needed to fill the gap while protecting its source from a long list of potential problems.
In theory, retirement can seem to be a simple concept, but when you begin to unpack what retirement planning entails, it can quickly become a game of mental gymnastics. It is more than picking a few investments, and if you’re not careful, you may find yourself trying to solve new problems with old ways of thinking using heuristics, but this often creates an illusion of control.
Investing is simply a spoke in a very large wheel
In the game of craps, it is said that players will throw the dice harder when they want a higher number and softer when they want a lower number. This is similar to thinking you can do more research to pick the right investment and somehow control the outcome, but it is all context dependent. An investment’s past performance is subject to many factors, such as economic and regulatory conditions, and cannot be relied upon for predicting future results.
So, the takeaway is that an investment doesn’t address the risks you face in retirement, and the sooner you figure out that investing is simply a spoke in a very large wheel, the sooner you can begin to formulate a true retirement road map.
Of course, the details of a retirement plan are situation dependent and can vary greatly from one person to another, which is why there isn’t necessarily a plug-and-play method. But there are common components to most situations, the first of which is finding your number that you’re solving for, then protecting the source of the income.
When it comes to retirement income, there are many things lingering that can put your retirement at risk, things such as: sequence of returns risk, market risk, interest rate risk, inflation risk, mortality risk, legislation risk, litigation risk, longevity risk, health risk, which are all examples of what you need to formulate a plan to protect against.
Three choices when it comes to risk
The idea of protecting something means that you insulate it, you hide it, you guard it, all to prevent it from being harmed. For instance, sequence of returns risk is an inherent risk of investing in the stock market and can be detrimental to the viability of an income strategy.
It is either a headwind or a tailwind, depending on economic conditions, which is unpredictable and uncontrollable. So, when it comes to risk, you have three choices:
- You can simply close your eyes and take the risk head on.
- You can avoid the risk altogether.
- You can transfer the risk to an insurance company.
The idea of transferring risk away from you and placing it onto the insurance company is appealing. People insure all sorts of things they own, such as homes, cars and businesses, but their largest asset is their income, and that is seldom thought of as something to insure.
When it comes to retirement planning, there are forms of insurance, such as a specially designed life insurance policy or an income-focused annuity, that can absorb risks that are specific to a retiree.
There is a lot to unpack here, but I think it is important to address the elephant in the room regarding insurance. Many people have negative thoughts about insurance, and it is understandable considering insurance companies do a terrible job with their messaging. However, even with poor messaging, the numbers can’t be ignored. There was $343 billion invested in annuities and $165 billion in life insurance premiums in 2022, according to the Insurance Information Institute.
So, the numbers support the desire many retirees have about transferring risk to insurance companies.
In the world of psychology, there is something called confirmation bias, which refers to the tendency of individuals to interpret, favor or recall information in a way that confirms or supports their existing beliefs or preconceptions. It is a cognitive bias that can influence how people gather, process and interpret information.
When people have a particular belief or hypothesis, confirmation bias can lead them to seek out information that supports their viewpoint while ignoring or downplaying evidence that contradicts it. This bias can affect various aspects of life, including retirement planning and the decision-making processes.
Confirmation bias can hurt your retirement planning
Confirmation bias can hinder critical thinking and objectivity because it can prevent individuals from considering alternative perspectives or engaging with information that challenges their existing beliefs.
I share all that to say that people who struggle to understand what mindset is needed for retirement can find themselves endlessly searching for information and interviewing advisers hoping to get confirmation of their belief that they can retire without having to change how they manage their investments.
I have two functional medicine doctors whom I hired, and I pay them to tell me what I need to be doing to stay healthy. I speak with them multiple times throughout the year to get updated labs, preventive prescriptions, health advice and diet and exercise advice. They ask questions, check on my progress, make recommendations and tell me when I need to adjust things to better myself.
I can do some research and go buy more supplements, but having them bring to me what I need to know saves me time and energy. They have the experience and knowledge that enables them to pinpoint problems and immediately guide my direction. No amount of effort on my part could yield the same results.
For me, it is about time, effort and results. Each one of us has 24 hours in a day, and unless you have cracked the code on making money, having a great marriage, having a close relationship with you children, being physically fit, being spiritually mature, having friends and taking care of yourself, something in your life is likely suffering.
Time is a zero-sum game, which means to have more time for one thing, you have less time for another, and when you spend time doing things you could hire someone else to do, you’re robbing time from more important things.
What I have experienced is that the more successful a person becomes, the more valuable their time becomes. To preserve those valuable hours, it becomes increasingly more important to surround yourself with professionals to whom you can delegate responsibility to free up your time.
Delegating to increase the quality of your time
There are many hacks that can be done to make things in your life better, but when it comes to time, there is only delegation. Time is your most precious resource, and how you use it is up to you. You can spend it worrying, researching and doing things you don’t want to do, or you can delegate and strategize to gain quality and quantity of time.
Insurance is a form of delegation since you are transferring the risk onto the insurance company, and by transferring this risk you not only eliminate the underlining risk, but it also removes the inherent worry you have about the risk. This has a multiplying effect because you have mitigated some risk while increasing the quality of your time.
Retirement planning can be an endless trail of discovery and can take years to learn whether what you’re doing will be successful or a complete failure, at which time it may be too late.
It is often best to find a financial adviser who can guide you through this process and who understands the retirement planning process, because, again, thinking you can solve these problems by simply buying an investment or pinching a few dollars by not purchasing insurance can put your retirement at risk. Delegating the research and leveraging the experience of a financial professional can help you leverage your time and increase your confidence.
There are strategies you can use that can help protect your wealth, create your unique income strategy and maximize your assets. You can discover how to do this and learn five questions you can ask yourself so your safely set up for retirement by visiting brianskrobonja.com.
Securities offered only by duly registered individuals through Madison Avenue Securities, LLC. (MAS), Member FINRA &SIPC. Advisory services offered only by duly registered individuals through Skrobonja Wealth Management (SWM), a registered investment advisor. Tax services offered only through Skrobonja Tax Consulting. MAS does not offer Build Banking or tax advice. Skrobonja Financial Group, LLC, Skrobonja Wealth Management, LLC, Skrobonja Insurance Services, LLC, Skrobonja Tax Consulting, and Build Banking are not affiliated with MAS.
Skrobonja Wealth Management, LLC is a registered investment adviser. Advisory services are only offered to clients or prospective clients where Skrobonja Wealth Management, LLC and its representatives are properly licensed or exempt from licensure.
The firm is a registered investment adviser with the state of Missouri, and may only transact business with residents of those states, or residents of other states where otherwise legally permitted subject to exemption or exclusion from registration requirements. Registration with the United States Securities and Exchange Commission or any state securities authority does not imply a certain level of skill or training.
The appearances in Kiplinger were obtained through a PR program. The columnist is not affiliated with, nor endorsed by Kiplinger. Kiplinger did not compensate the columnist in any way.
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Brian Skrobonja is a Chartered Financial Consultant (ChFC®) and Certified Private Wealth Advisor (CPWA®), as well as an author, blogger, podcaster and speaker. He is the founder and president of a St. Louis, Mo.-based wealth management firm. His goal is to help his audience discover the root of their beliefs about money and challenge them to think differently to reach their goals. Brian is the author of three books, and his Common Sense podcast was named one of the Top 10 podcasts by Forbes. In 2017, 2019, 2020, 2021 and 2022, Brian was awarded Best Wealth Manager. In 2021, he received Best in Business and the Future 50 in 2018 from St. Louis Small Business.
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