Commentary: Building a pre-retirement nest

My husband and I paid our annual visit to the financial adviser who watches over our undoubtedly inadequate retirement savings, an appointment that is not unlike those with the dentist: necessary but never fun.

During our meeting, I proudly listed the home maintenance projects I had undertaken as our retirement approaches - painting the interior and the exterior of the house, replacing the fence, updating the kitchen a bit, and having the appliances and heating and air-conditioning units checked to see if I need to buy new ones.

Better to pay the cost of those chores while we are still collecting paychecks, I said, instead of taking the money out of savings once our time in the shrinking world of newspapers comes to an end.

I thought I was so smart.

My pre-retirement checklist included more practical items than simply updating a will or switching from stocks to bonds. I figured that every penny we spent now on maintaining our major asset - our home - was one less penny we would have to pay out when we are living on a fixed income.

"Pre-retirement nesting," our adviser said with a smile. "I see it all the time."

After the sting of learning that I was not so clever passed, I was curious.

Nesting? That's a term used to describe the behavior of pregnant women in the days and weeks before they are due to deliver. I'd never heard it used to describe people on the cusp of retirement.

I thought "empty nesters" was the term they used to describe us, not "nesters." I thought we were the group that was downsizing and de-cluttering, not fluffing.

Check every retirement checklist out there - there are plenty - and you won't find "fix the fence" on any of them. All of the lists tell you to "create a realistic budget," but none of them say, "Check the dryer to see if it will need to be replaced soon."

Review your life insurance needs, sure. But where do they tell you to replace the kitchen counter with granite because nobody will buy your house unless you do?

"You are doing the right thing," said Christine Fahlund, senior financial planner with T. Rowe Price and an expert on retirement issues.

"All the big-ticket items should be paid for while you are working so your investments can continue to grow."

She made the comparison to the crash of 2008. Most portfolios lost 20 percent, but they are slowly recovering.

"Compare that with drawing down your portfolio by $10,000 or $15,000 or more to do these things. That money is gone; it is spent. There is no rebound. And that is much more significant than what happened in 2008."

It is part of putting our financial house in order - by putting our actual house in order. We are doing these projects at the best possible time, while we have the income to pay for them and the time to enjoy them.

"We see a lot of pre-retirees fixing up their houses in anticipation of moving or downsizing. But they are making it nice for somebody else to enjoy," Fahlund said. The advantage for us, she added, is that if we want or need to sell, the house will be ready.

Fahlund is a big proponent of something T. Rowe Price calls "practice retirement." For emotional or financial reasons, people aren't retiring when they thought they would, at 62 or even 65. So she encourages them to reduce the amount of money they are saving and give themselves permission to play.

"Let your salary fund your fun," she said. It staves off the disappointment of not playing golf every day if you take a nice golf trip. You can't retire to the beach right now, but maybe you can vacation there with the grandkids.

I guess my idea of fun is another bucket of paint and one more contractor.

(Susan Reimer: susan.reimer@baltsun.com)

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