Apparently, there are stages in the pension-receipt process. The process isn’t as simple as waking up one day to find a check in your mailbox. Let’s call these stages Delight, Depression, Sticker Shock, Fear, and Acceptance. If you’ve been a smart planner, you may skip from stage 1 to stage 5 with perhaps a side trip to Direct Deposit. If you’ve done everything right, at Acceptance, you will possibly smile and say thanks. You have maxed out your 501K and have back-up investments. You already know how much you’ll get each month and how long your funds will last.
If you’re like many of us, though, and you haven’t been thinking too hard about all of this, you may go through all of the stages. It’s delightful to realize that someone is actually going to send you a check for the rest of your life. Enjoy it! Party a little. Contemplate never working again, even though you know that isn’t going to happen. For some, depression sets in all too soon as they feel somehow extraneous. If you lose your job in Great Britain, they say you were made redundant. Getting a pension may make you feel both redundant and invisible.
Sticker Shock – I can’t think of another term for the sight of that first check. For some of us, it’s a lot smaller than we expected. First, remember that interim checks (the first several months for most people) are only about two-thirds of the real check. Second, breathe.
Fear comes close on the heels of Sticker Shock if the number on that check is significantly smaller than expected. Don’t get lost in the fear. Immediately make a list of all your other assets and income sources. Then, if you haven’t ever done this, seek out a reputable financial adviser immediately. A good adviser can tell you how to make up for lost time and, realistically, exactly how much making up you can expect to do. Remember that it’s increasingly likely that you’ll work until you’re 70 – maximum Social Security age. Schedule an investment tune-up and bite the bullet.
Acceptance comes differently for the non-planning crew. At this stage, it’s acceptance of responsibility. Acceptance of the ability to create a different future. Acceptance that all is not lost.
I’m not a financial planner or financial expert, but I can offer one piece of advise. Learn your financial position now. Go to the internet for forms and resources – NOW!