March 2003

Retirement Hints for Partners in CPA Firms

By Barry F. Doll, CPA, PricewaterhouseCoopers, New York, N.Y.

In 2001, PricewaterhouseCoopers’ Partner Affairs department surveyed more than 300 recently retired partners in order to better understand the retirement transition challenges these partners experience and determine how the firm could help.

The following are excerpts from many of these surveys. These comments and observations provided the firm with useful information to understand what retiring and retired partners need to make the retirement process more meaningful and effective. As a result of the survey, Pricewater-houseCoopers has implemented several new programs aimed at easing the transition of this major life event.

Survey Replies

The survey asked retirees to describe in one word their initial feelings about retirement. The responses were generally positive, sprinkled with a few concerns. Words submitted included: excitement, unsure, freedom, happy, anxiety, and sadness.

The survey also solicited advice to new retirees. Most retired partners strongly recommended keeping active, whether in volunteer work, hobbies, travel, reading, or new business ventures. The message was clearly that retirement does not mean inactivity. Replies included the following:

• Use your talents and realize this is a “new beginning” and not an end.
• Set goals two to three years in advance. Good planning is helpful … focus on financial and emotional issues.
• You should develop a routine (daily) and not just allow things to happen or not happen—you really are on your own—work, family, etc.
• Seek some kind of employment, even if [it is] part time. It’s critical to stay active.
• Learn to relax without feeling guilty about it! Stay busy, mentally and physically. Remember, it’s never too late to learn new things and improve old things.
• Don't make decisions about taking another job too soon after retirement. Take some time to reflect, relax, and think through what you want to do.
• Make a priority list of the things you’ve always wanted to do but didn’t have the time to do. Start doing the highest-priority items immediately.
• Consider retirement a process rather than an event.
• Don’t worry about how you will fill your day. If you are reasonably active physically, have outside interests and are willing to be involved in your community affairs … you will wonder where the time flies. But nail down the finances.

The Significant Other

An often-overlooked but important aspect of retirement is the new or different relationship with one’s spouse—the partner’s partner. The survey asked spouses for their advice to new retirees. A retired partner may need to be careful not to intrude or tread on a spouse’s independent lifestyle, which might not be easy to change. Spouses offered the following comments:

• Retirement is great but not for lunch.
• Remember we have lives that are already full, and don’t expect to be waited on all the time.
• Spouses have their own life in community activities. Make sure you don’t make them feel guilty when they continue their own lives.
• Be prepared for a lot of togetherness. [One wife described it as half the money, twice the husband.]
• Continue to pursue and respect other interests; take care of your health.
• Sit down and review life’s priorities. Develop a jointly agreed-upon plan, together with benchmarks concerning the high-priority items. Allow plenty of time to relax together.

Adjusting Expectations

PricewaterhouseCoopers was in-terested in surprises the partners experienced after retiring. Despite many comments about missing the daily contact with other partners, most retirees were relatively surprised at how easily they fell into a new routine:

• How busy I am. My list of things to do keeps getting longer.
• Instead of being bored and frustrated I found a new sense of freedom. For the first time in years I was my own boss and totally accountable for my state of mind.
• The first six months [were] lonely and depressing that your successors never ask for your advice … followed by bliss!
• How hard I thought it would be and how easy it really is.
• [I was surprised that] my handicap did not drop by 10 strokes.
• [You will be surprised by] how much you will miss the relationships and connections at PwC and with clients.

What They Would Do Differently

Finally, the survey asked retirees what, if anything, they would have done differently before retiring. The primary recommendation was to begin retirement planning, ncluding financial and tax planning, at an earlier stage. The following were other comments:

• Put as much of the financial/administrative side of life on automatic pilot as soon as possible. No need to maximize all investment and optimize all transactions … Simplify and try to get out of the middle of all the minutiae.
• We traveled extensively the first year. I would spread it out, but highly recommend travel.
• Develop a greater understanding of the income tax considerations in the year of retirement.
• I would have said appropriate farewells (good-byes) to all partners.
• Would have done advance planning (for post-retirement activities) one to two years before actually retiring.
• Although I tried hard to transition my clients (and I believe they were transitioned successfully), I would have liked to have done a better job for them and for the staff that continued to service them.

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