If people concentrated on the really important things in life, there’d be a shortage of fishing poles. – Doug Larson

What is your vision of retirement? Could be one of three general thoughts according to experts. These include:

• Just keep right on working either here or elsewhere on a more limited basis.

• Retire, start my list of things to do and just basically relax.

• Travel, join clubs, compete in the Senior Olympics, just be really active and do the things I could not do when I was working.

Then there’s the biggie. When do I pull the plug? How old do I want to be when I hang it up?

These and more issues will be dealt with in the coming minutes. I think it is safe to say this may be one of the most important articles you read this year! Oh, and I believe you’ll find value in this article even if you are already retiring or retired.

Today, as I write, the typical 50-year old has about $60,000 saved for retirement. Given an average Social Security check of $1,355 a month, with a maximum around $2,300 a month, the savings are good for about one year. Maybe less. In fact, the average retired couple spends about $260,000 just in health-care-related expenses in their lives, assuming nothing catastrophic happens. This is one really scary scenario. Little income, virtually no savings and bigger expenses for many items.

How about you? How much do you have saved, in cash, spendable now? If like many shop owners you likely have a lot of your assets in the form of your shop, the building and the equipment. And, if you are like many shop owners, you may well be overestimating the value of all these assets. Moreover, please consider:

• Shop buildings are typically hard to sell. There are the required environmental studies if any banks are involved, building issues and more. You may find your building is worth less than you think, and will take longer to sell than you are estimating. Do yourself a HUGE favor and ask your attorney and accountant for the name of a good commercial real estate person, if you don’t have one, and get some idea of value and time on the market.

• Equipment depreciates. Really expensive electrical stuff depreciates REALLY fast. Parts and supply inventory is either partly used, obsolete or who knows, but isn’t worth much. The value of all your stuff is likely a lot less than you think. Do an inventory and get some realistic numbers together.

• Selling to a child or key worker is great. I envy you if that’s the case. But, as any good parent or boss of a key person is likely to do, you will all but “give away the farm” and accept lower dollars or payments than if you sold outright. Worth thinking about for sure.

The result is that cash is king when it comes to retiring. And, it gives you time to sell your operations for the highest dollar without panicking. The big question here is how much is enough?

There are a number of approaches. The most conservative says you can pull about 4% of your cash investments every year for income and the principal remain intact, maybe grow a little. For example, if you are getting about $24,000 in Social Security income, and need another $70,000 a year to live, you’ll need access to approximately $1,750,000 in your investment pot.

Another approach says spend down so you have nothing in the end. This is a fabulous approach and makes for great bumper stickers, if you know in advance how long you will live to the day! Could be around the average of 80 and change. Could be 95! You plan for the average and what happens to the next 10 or 15 years? Seems either the first scenario or some modified version works best.

Before we go any further, I am no broker, financial planner or anything else. I did, however, have to retire, and have done a ton of research on this, and am sharing my thoughts. You need to go get the thoughts of your tax pro, and a really good, experienced and well-rated financial guru near home.

There are also a number of retirement calculators on the internet. Just search on “retirement calculators.” Be sure to use one provided by a name you recognize, and never complete one that requires you to provide personal identification or information that might identify you.

Oh, and before you get all depressed, give up and attempt to jump out of your first-floor shop window (which will only lead to some bruises and a broken window that has to be fixed), no one’s situation is ever helpless. You do need to get a handle on what you’ve got, what you’ll need for your own vision of retirement.

One warning here. Assuming you are married or have a significant other, include them in your retirement plans discussion. One owner I know had dreams of world cruises. He and his wife had never been on a boat much less a cruise.

Well, one windy day we went fishing out on Lake Michigan as a group. It was a four-hour trip into swells and just about everything Lake Michigan could hand us considering we were on a large boat. We were no more than 5 minutes into the trip when the lady became violently ill, and stayed that way for 3 hours and 55 more minutes since she insisted we continue on. The comment I had getting off the boat was “You know what you can do with those cruise tickets for next month don’t you?” Oops. FYI, none of us caught much that day.

So, summarizing, it’s time to start:

• Crafting your vision, in tandem with your other retirement partner, of what retirement looks like and how much money that will require.

• Meet with pros to get some idea of what you’ll need, what you have, and what you need to do to meet your goals.

It is time I stepped aside for a less experienced and less able man – Scott Elledge

OK, with all of that firmly in mind, we’ll return to the question of when to pull the plug. Again, it depends! After interviewing many for this article, and from my own experiences, I offer the following:

The best time to retire is when you are able to physically and mentally carry out your retirement vision, assuming adequate dollars are available.

Well, that takes care of about 5% of us. For the other 95%, retirement age is a balancing act and will differ from one person to another. And even with your best planning, it may not work out the way you think.

If you will indulge me, a personal story. My plan was to begin slowing down in my early to mid-60s and begin transitioning business to someone else. But I would stay involved and work on some really part-time basis just to keep an eye on things and stay active in the business. That was until my physical at 49.5 years of age when I was handed the diagnosis of an illness that will eventually be terminal. I became disabled over a period of time due to fatigue, constant nausea, and a host of other issues. Add to that a 10-pound lifting limit, and I became pretty useless quickly in this industry. So, instead of my plan, I was forced out by my doctor and attorney to a medical retirement at the ripe old age of 57.

I share this story for one simple reason and to share one thought. While I hope and pray you live long, prosper and stay healthy, there are no guarantees. My experience tells me that no one gets past about 50 without a story. I just hope yours is far more boring that mine. But, as one of my many docs is apt to say, “Plan for and expect the worst, hope for the best.” In your planning, assume the worst and I pray you are pleasantly surprised. Just know that your plans are great, but they may not be possible in the end.

Also, please allow me to thank Jim Wilder and the entire team at Undercar Digest and MD Publications, along with my fellow writers. After our many years together, I have learned that this team is made up of the most amazing, considerate, caring and thoughtful people. Throughout this experience of mine, Jim has been great about chasing me all over for my articles, while all have passed along encouraging notes and thoughts. I have been blessed to be part of this group.

OK, so with that in mind, assuming you realize a plan is critical, but may well be subject to change due to health, finances, family issues and more. Make your plan flexible, have some B and C plans in place and be ready to change as needed.

After reading a pile of articles and talking with some contacts in the Labor Department and others, it seems that:

Of those working now, more than 70% plan some level of retirement work.

About a third of those planning on working report that the reason is economic. The balance have a variety of reasons, led by just wanting the distraction. Just FYI, only about 19% of those older than 65 and retired are actually working.

One person I interviewed did share that the best way to slow and work part time is to stay in your business, or at least the same industry. Trying to cross industries is tough these days. And, it is unfortunate, but more than one employer will pay you less, likely well under market, just because there’s an assumption you are just doing this for fun.

One shop owner with three locations I know is a great example of how to work part time. He sold his shops. Having no kids that wanted in, they were sold to competitors.

I digress here a moment, what they say is true, go out on top, not when you’ve been sick for a while, cash flow has fallen a bunch and the building and shop maintenance has been slipping. Sell for maximum value, not fire-sale levels.

OK, back to it. After selling his shops, the owner I mentioned went to work as a part-time service adviser for a local car dealership where he used to buy parts. He works less than the amount needed to worry about health-insurance issues, and is receiving very fair pay in line with others. He has a lot of flexibility and the service manager loves him since he realizes our shop owner isn’t in the middle of his first rodeo, and knows how to handle an upset vehicle owner. Win, win for all.

We have covered a lot in this article. In fact, I feel the hook coming. We’ll talk about more in the future, but hopefully this gives you a jump start.

Retirement at sixty-five is ridiculous. When I was 65 I still had pimples – George Burns