THE MONEY MINUTE: What is the definition of retirement?

by Jac M. Arbour CFP®, ChFC®
President, J.M. Arbour Wealth Management

What is retirement? The definition is forever evolving, and the answer depends on whom you ask. There is no list of things that can describe exactly what retirement is or what it is not. The retiree is the architect and, therefore, the decision-maker. It will be whatever he or she chooses.

However, there is one thing in common for all retirees, the need for income. How a person can derive that income are endless and, again, in the hands of the retiree.

Have you determined what your retirement will cost? Are you financially prepared for those costs? Do you know how to create the retirement income you will need—income that will last as long as you do, no matter how long you live?

For some people, the answers to these last questions are simple and straightforward. If this is you, congratulations. For many people, however, these questions remain unanswered and are causing financial worry. Whether you have it figured out or feel the need to figure it out; I hope this brief article greases the mental wheels.

Pensions are not as prevalent as they once were, and the average Social Security check is not sufficient to cover monthly expenses for most people. The stock, bond, and credit markets are volatile and can be unpredictable. Unforeseen life events can strike at any time. Understandably, as people look ahead to 25 years or more in retirement, they become concerned they will face the issue of running out of money.

Some people believe that a portfolio containing little to no market risk is the solution: “I am better off not losing anything than risking some of it,” one might believe. However, low-risk investments are not always the answer to preserving an asset base. With this in mind, we encourage clients to consider “opportunity cost” (the loss of potential gain from another alternative when one alternative is chosen) and other factors such as inflation and spending policies.

We all have needs, wants, and desires, including the desire to help loved ones and leave them a little something after we are gone. Some of us have outstanding debts, we all have taxes to pay, and we all face the impacts of inflation.

It is heavily recommended to run your household like a business, which means knowing what is coming in and what is going out each month, right down to the last penny. This makes knowing what to expect, even in the future, much easier.

Retirees will draw from pensions, part-time salaries, business or passive income, investment income, and sometimes, inheritances. Depending on which sources you will have determines the best ways to strategically create an income plan and spending policy. Withdrawal rates, taxes, inflation, investment allocations, market volatility, and legacy goals will all have an impact.

These are just a few concepts to consider, and each concept has many bullet points that live below each concept. If you are interested in learning more about all things to consider when creating income as a retiree, we have a resource that explains the details

We recently finished writing a resource for retirees in search of high-quality information about creating retirement income, and it is titled: The Absolute Guide to Predictable Retirement Income. To receive your copy, please call our office at 207-248-6767. We will be happy to send it to you free of charge.

See you all next month,


Jac Arbour CFP®, ChFC®

Jac Arbour is the President of J.M. Arbour Wealth Management. He can be reached at 207-248-6767 or

Investment advisory services are offered through Foundations Investment Advisors, LLC, an SEC registered investment adviser.

Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the CFP® certification mark, the CERTIFIED FINANCIAL PLANNER™ certification mark, and the CFP® certification mark (with plaque design) logo in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.


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1 reply
  1. Another
    Another says:

    Advisers have their place, but if you just need to create a comprehensive financial plan you can do it yourself with a financial planning tool like The Complete Retirement Planner. Same information, for a fraction of the cost, and easy to do. The most important step is to have a financial plan in the first place. Very important and valuable.


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