“Lawyer Norm Keith is 58 and laughs hard when asked about his readiness for retirement.” There is an old adage that most good lawyers live well work hard and die poor”, he says referencing the quote from American Lawyer and statesman, Daniel Webster. “Many probably for appearances sake, or life enjoyment or because they are not thinking or planning ahead.” (Canadian Lawyer Mag, June 1st 2015)
As a lawyer who owns or works for a small or large firm, or in the capacity as a sole practitioner, you need to be prepared to take responsibility for your financial future. Most firms don’t offer group retirement plans and even when they do, would not properly address what would be required to replace lifestyle expenses at retirement or earlier. Embrace the fact in most cases, You Are Your Retirement Plan.
Begin with the end in mind. Waiting too long to think about retirement means, working because you have to, not because you want to. Put a plan in motion that will allow you to put your assets to work for you, so that at some point you can decide to stop working altogether. Keep in mind, planning to retire can occur only when there are sufficient assets or capital available to replace your current lifestyle.
THREATS THAT CAN DERAIL YOUR RETIREMENT PLANS
- Loss of employment. The word on Bay street is that big firms are pushing partners out, in some cases in their late 40’s and 50’s in order to thin the ranks and make room for less expensive, younger lawyers.
- Divorce. Imagine you’ve been on track with a retirement plan and then it blows up because suddenly half of your assets are gone.
- Income declining or stagnant. Due to the reduced profitability of firms
- Market Conditions. Investment returns on portfolios have generally been lower since 2008
- Illness. A disability or critical illness can mean your tapping into assets sooner than planned in order to maintain lifestyle until you recover
(Source for point 1-4, Canadian Lawyer Mag, June 2015)