Getting Over Fears of Retirement

Why do such a vast number of lawyers believe they will practice law forever? “Dying at the desk” is a mantra too often heard in the legal community. Lawyers owe a duty to maintain competency and skill in our representation. At some point, we must wrestle ourselves away from the 60-hour workweek and the stress of the profession. Plan for retirement now, set your goal, and maintain that goal.

Over 12,000 baby boomers will turn 65 every day nationally. Fourteen percent of all lawyers —roughly 1 in 7 — are 65 or older. While only about 7% of all U.S. workers are 65, twice as many lawyers work beyond age 65 than all other workers.

Many are afraid of the idea of not being in the office. Often, their recently retired colleagues get sick or die. Rarely do we see the “golden parachute” in a law firm as an incentive to retire. Without a plan in place, retirement can be a scary, daunting experience that many put off for too many years. Some common fears of retiring include:

1. Financial Insecurity: Retirement can raise concerns about having enough money to live on, especially with the rising costs of healthcare and living expenses.
2. Loss of Identity: Many people define themselves by being lawyers or judges. Retirement can bring a sense of loss of purpose and identity.
3. Boredom: The prospect of having an abundance of free time can be unsettling, and many fear becoming bored or unfulfilled in retirement.
4. Health Issues: As people age, health issues become more common, and the fear of declining health and mobility are significant concerns.
5. Social Isolation: Retirement can mean a loss of daily social interactions with colleagues, resulting in feelings of loneliness and isolation. Missing out on the day-to-day interaction with colleagues at the courthouse, in the law firm, or at the local lawyer hangouts can be discomforting.

We all fantasize about living on a beach, on a golf course, or in the idyllic location of our dreams. Each of those retirement goals comes at a price. Even the best retirement plans can get waylaid by unexpected expenses, rising health costs, and inflation. Some common retirement expenses include:

1. Housing: Mortgage payments or rent, property taxes, homeowner’s insurance, and maintenance costs.
2. Healthcare: Medicare premiums, supplemental insurance, out-of-pocket expenses, and long-term care.
3. Food and Household Expenses: Groceries, dining out, and household supplies.
4. Transportation: Car payments, insurance, maintenance, and gas or public transportation costs.
5. Leisure and Entertainment: Travel, hobbies, and entertainment expenses.
6. Taxes: Income taxes on retirement account withdrawals and Social Security benefits.

So, what are the important steps to take now to prepare yourself to leave the practice and retire? You need to both plan and plan well in advance; start your retirement plan at least 10 years prior to your projected retirement date.

1. Caseload: Start reducing your caseload by only taking cases in the area that provides you with the most satisfaction. Gradually reducing your caseload over several years, only taking on the type of clients and cases that you enjoy, will make the retirement transition much smoother. Remember that you have partners, firm members, or colleagues who will be pleased to take on your cases. You might even discover that your income may increase despite the decreased workload by taking on only the “A+” clients.
2. Staff and Employees: Ensure that you are mindful of your employees. Provide them with the opportunity to transition gradually to other members of the firm; alternatively, recommend your staff to colleagues or other firms. Importantly, do all you can to reward staff for remaining with you by being transparent about your plans and their opportunities during and at the end of your retirement process.
3. Financial Planning: If you have not been contributing to your IRA, Roth, 401(k), or SEP for decades prior to retirement, you may not have enough built up to live comfortably for the next few decades. A journey of a thousand miles begins with the first step — even if you are a late starter, starting now gives you the best chance for a better outcome. Often, the help of a qualified financial professional may help you achieve your retirement goals in an abbreviated time frame. Some practice areas (think personal injury, wrongful death, and other tort fields) offer the advantage of structuring your fees to enhance your retirement income stream, just as clients can structure their awards. Take advantage of the tax savings these retirement plans offer while also building your nest egg for life after the law.
4. Succession Planning: Several years before your retirement, plan so that your partners and associates (or, if you are a solo, your named successor) can quickly and easily transition your clients to competent counsel. In many jurisdictions, the successor, trustee, surrogate, or receiver must be appointed by a court. Make sure that your partner or successor is given full access to calendaring, active files, passwords, and client information. Some solo or small firm lawyers can sell their practice for a profit as their succession plan, a strategy that benefits the departing lawyer and the successor and gives the clients the opportunity to choose to stay in a practice they are familiar with. The lawyer’s ethical responsibility is to make sure that the clients are protected when you close the office.
5. Liability Insurance: Make sure that your malpractice policy is up to date and that you can obtain a “tail” policy after you have left the practice of law. Many carriers have strict policy rules that state that you must be insured with a particular carrier for several years to obtain an extended reporting endorsement, or “tail” coverage. If possible, do not leave the practice without such a policy in place.
6. Law After Retirement: You do not have to leave the law when you leave the practice. Consider teaching, either CLE or at your local law school. Author an article, or a series of articles, for your state or local bar. Do consulting work for other lawyers; your years of practice and expertise are invaluable and can produce income. Numerous pro bono opportunities exist that can benefit you, the clients, and the profession. In many cases, pro bono volunteer work is covered by the organization’s professional liability policy. Other opportunities, such as sitting judge pro tem or senior judging for retired judges, judging moot court competitions, and public speaking, can keep you on the pulse of the law without requiring your everyday devotion, long hours, or stress of practice.

A great advantage of leaving the practice is leaving the overhead of the practice. Some ways in which you can save in your hard-earned retirement for things you want to do include:

1. Office Expenses: The burden of setting aside minimum monthly office expenses will be lifted from your shoulders. Saving on not only staff costs but also the day-to-day expenses like cleaning costs and going out to lunch will significantly lower your spending. Being at home can reduce or eliminate the duplicated expenses of working out of an office, including mortgage or rent payments, property taxes, and maintenance costs.
2. Transportation Costs: Without a daily commute, your transportation costs will diminish greatly. If you regularly drive to the office, the courthouse, the bar association, or client meetings, the extra fees for tolls and parking add up. Without the need to travel for business, you can adopt a healthier lifestyle. Consider using public transportation, carpooling, or walking instead of driving to reduce transportation expenses.
3. Business Discretionary Spending: Nonessential items, such as business dining, entertainment, and travel, are expenses that you may not think about until you find that those items are no longer in your monthly budget.
4. Taking Advantage of Senior Discounts: Many businesses offer discounts to seniors, which can help reduce expenses on everything from groceries to travel.
5. Reviewing Insurance Policies: Many auto insurance carriers reduce their rates considerably for seniors and those who travel less than 15,000 miles per year. Reviewing your insurance policies and shopping around for better rates can help reduce insurance costs.

Plan, pick a date, and stick to it. That “next last case” is the first case you do not accept. Enjoy retirement, read a book, volunteer at a local charity, or travel to those “bucket list” locations that you never had time for. This is for you. This is your reward for long years of demanding work. This is your next life. This is retirement from practice. Enjoy every minute.