CPA INSIDER

Heading off into the sunset? Avoid these 5 retirement pitfalls

Steering clear of crucial mistakes can help make a tough process somewhat easier.
By Jennifer Wilson

As more and more Baby Boomers (those born 1946–1964) near the end of their careers, I find myself doing more and more to support those preparing for retirement. There seems to be no business task more difficult than slowly disengaging from the thing that gives you your identity, the clients you love, the routine you’ve established, and the team you’ve been integral to for many years.

From my vantage point, the retirement process is a truly humbling and sometimes painful experience that most of us do not understand or appreciate.

That’s why I wanted to try to make a difficult process easier for those facing it. Outlined below are five important mistakes to avoid. Perhaps by reading this, you can avoid some of the pitfalls I’ve witnessed with others:

  1. Don’t wait until the last minute to tell firm leaders or begin transition. Your firm’s partnership agreement may have a notice period to give plenty of time for a proper and complete transition (we recommend a minimum of two years). Even if you aren’t required to give notice, you should share your retirement plans with the key leaders in your firm and make concrete plans to begin introducing others to your clients and preparing for a complete transition, which ideally occurs over at least two cycles of service. If your position has considerable internal responsibilities or if you’re involved with networking groups, associations, or other business development activities, you’ll need time to identify the right person to assume each role. Step out of any denial you’re carrying, confess your plans, and begin transitioning!
  2. Don’t hang on too long. For some, the idea of giving up their work identity and responsibilities can be overwhelming, leading to the temptation to stay in a particular position too long. Your firm needs to learn to thrive without you, and the people around you deserve an opportunity to step up and take on your clients and other responsibilities. Even if your firm has asked you to continue on in some capacity, don’t hang on to your core responsibilities. Doing so would only tempt you to put off your own acceptance of the necessary transition. And, when the time comes to truly quit working—either because you’re ready or because the firm does not wish to continue with you—you should make the process easier for those you’re leaving behind and let go with grace and dignity.
  3. Don’t communicate that you’re retiring when you’re simply transitioning. For most of us, the term “retirement” means quitting work at your firm. For many, the first step toward full retirement is not completely quitting work. Instead, many take a first step of selling their equity back (beginning their buyout) and transitioning their work, but continuing on at the firm, working in new and different ways. If you and your partners plan to have you continue working at the firm in some capacity, consider using different language to describe this first step in the retirement process. When communicating your plan, you can say, “I’m going to be transitioning my responsibilities and cutting back some,” or “I’m going to be changing roles at the firm,” or “I’m going to begin working part time, taking time off during the slower periods,” or whatever it is that you’ll be doing. When you say, “I’m retiring,” most people picture you being gone, and it can create uncertainty that isn’t necessary in the early stages of the transition process.
  4. Transition completely, even if you’re going to continue working after your official retirement date. The ideal scenario is that you transition virtually all that you were doing in the “old role” to successors and that you develop a “new role” with new responsibilities. For instance, if you have been playing the role of managing partner, plan to transition all leadership responsibilities before your official completion date and define a new role where perhaps you are active in the market, developing business, and/or teaching a portion of your firm’s leadership curriculum. If you are a tax partner, plan to transition all of your clients and existing work before your completion date and then take on a new role—for instance, reviewing higher-level returns for people other than your clients. Most firms can always use another great reviewer!
  5. Don’t be selfish. For many facing retirement, a feeling of entitlement creeps in—based on the years of investment you’ve made in the firm and the respect you feel you’ve earned. This entitlement attitude can make it look as if (1) you think you know best and (2) the firm owes you something. That way of thinking can sometimes cause a dominance or defensiveness when discussing transition that makes it very difficult for your fellow partners and firm leaders to openly share what they want (or don’t want) to see happen in the transition process. Please do all that you can to set your selfish interest aside to do what’s best for the entity as a whole. Be open to honest input from your firm’s leaders about what they feel will work best. The days of you calling the shots are waning, and the people you’ve entrusted must step up and do what’s best for the firm. Hopefully, your love of what you’ve built will enable you to step outside of yourself to do what’s right for the greater good.

Retirement isn’t easy, and it surely isn’t one-size-fits-all. Regardless of your transition plans, being gracious, generous, objective, and clear in your communications and open to the input of others will go a long way to easing your path.  

Set an example for how to powerfully complete your relationship with the firm. It may be the most important—and memorable—leadership legacy you’ll leave behind.

Jennifer Wilson

Jennifer Wilson is a partner and co-founder of ConvergenceCoaching LLC, a leadership and marketing consulting and coaching firm that helps leaders achieve success. Learn more about the company and its services at convergencecoaching.com .

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