By Bob Potter and Richard Brown

Retirement is a big life change - and it involves a lot more than money. You can probably think of people who jumped into retirement quickly. Perhaps they found a buy-out offer from their company too attractive to pass up. Maybe they figured out that they had enough money and were fed up with the stress and irritation of work and just told the boss “goodbye” one day. Whatever the reason, check back on these folks a year later and you may find that many are lost. Work represented not only a source of income, but also a social environment, a way of measuring self-worth, a structure to life. If you think retirement is just an elongated vacation, you’re in for a surprise. There are only so many rounds of golf or rubbers of bridge you want to play in a week and so much travel you want to do in a year.

Look at retirement as a career change. Do a lot of research. Face these facts: retirement is expensive, many people have neither a company pension nor much savings to rely on. Social Security doesn’t go very far, either. Furthermore, people live a lot longer in retirement now than they used to; thanks to healthier lifestyles and medical advances, many people are not “old” at 70, 80 or even 90. This means that for many, retirement will include some period of working for pay. It may not be the high level, high stress professional job you once had - but even a few hours a week at a very modest pay rate can help pay the bills. Be alert to what you may find.

Of course it’s important to understand the financial aspects of retirement. It’s easier to recover from financial mistakes when you’re young. Time is on your side. Fortunes lost can be re-earned. Not so in retirement! Retirees who put the bulk of their nest eggs into high-flying technology stocks in the 1990s and hung on through the three-year bear market in 2000-2002 could have lost 75 percent of their money. The chances are they’ll never recover. On the other hand, those who insist on the 100 percent security of government-backed CDs and bonds may find their purchasing power severely eroded as the decades pass.

It’s important to have some money invested in equities for the long term to help maintain purchasing power down the road. At the same time, putting the money you will need to spend over the next couple of years into the stock market can be very risky. Rules of thumb (such as subtracting your age from 100 to determine the percentage of your portfolio that should be in stocks) are useless, as a rule of thumb. You need to find the portfolio mix that gives you the combination of current income, growth and capital preservation that you need. So it may make sense to find a competent professional who can help you navigate the financial minefields in retirement.

It’s essential to have an investment portfolio that is diversified, well-balanced and driven by a sound financial plan. Your money can’t stop working when you do.

Bob Potter and Richard S. Brown are JNBA financial advisors.