Planning ahead has one retiree sitting pretty
Robin Adolphe began his career as a teacher, but after 16 years, he decided to go to law school in 1981. After a long career where he worked as a partner at an 11-lawyer firm, opened his own practice with associates and eventually practised solo, the 67-year-old turned in his practice certificate last June, officially closing the door to his Penticton firm Adolphe & Company. While on holiday with his wife in Australia this past February, Adolphe took time out to talk about his own retirement process.
What steps did you take to retire/how did you plan to retire?
I did plan my future for nearly 20 years before retirement. So I was 45 or 46 when I started the first of my five-year plans. My first goal was to retire our residential mortgage. My second was to contribute to both my wife’s and my RRSPs so that they were equal in amount prior to retirement. I invested with some of my partners in a commercial building that would house our practice. We planned the building, got two national firms as tenants, and then built.
When I left the partnership to practise on my own, I rented a commercial building at first and then bought the building from the landlord, who was a retired accountant, by purchasing the shares of his company rather than the building itself. That choice had good tax consequences down the road.
How important is it to have a “nest egg” before retiring?
Most lawyers do not have a pension plan, unless they are with a large firm, are in-house counsel or practise in the public sector. So your “nest egg” is your pension, so to speak.
How did you divest yourself of your practice?
My approach was to recognize that a sole practice has little value, so I did not try to sell it. In the first stage, I limited new files to ones I felt I could complete within a couple of years. As time went on, I limited the files more until I was taking no new files, only working on the ones already in progress. By the end of 2009, I had found homes for many of the remaining files.
My criteria were to make sure that the new lawyer would look after my client’s interests properly and that the file would be completed in a reasonable time. I was not entirely successful in that endeavour. By 2010 I had about five or six files remaining, but by June I had either completed the files or farmed them out.
How did you manage your clients and client records?
I kept in contact with my clients and made sure that their files were transferred. I was fortunate in that my long-time legal assistant went to work for my former firm and she was able to continue with some files.
What effect did your retirement have on your clients?
My clients were very supportive and, in some cases, a bit envious. As I said, I tried to make sure they would be happy with their new lawyers. Where there were problems, I did a second referral and kept myself available. I had only one instance where I had to apply to be removed from the record — a file that I knew I should not have taken in the first place, but I was always seen as the lawyer in town who would take files that other lawyers would not.
How has the planning and preparation you did before and during the retirement process affected your ability to enjoy your retirement now?
The critical part of the planning is to do a financial statement showing what your yearly expenses are and then determine which expenses will either stop (saving 10+ per cent of your net income a year, RRSPs, professional fees, office expenses, additional insurance, etc.) or can be eliminated (for example, the mortgage on the building where I practised.). I felt that it was logical to assume that my wife and I would be able to live a reasonable lifestyle with an income of $60,000 each. That would allow us to be in the income bracket that had a lower tax.
As it turns out, we are doing very well and my investments have been successful to the extent that the next 20 years seem to be reasonably well provided for.
What advice do you have for sole practitioners who are ready to retire now?
I would tell them that they should sit down with an accountant and go over their assets, cash flow, and expenses expected in retirement. I know of many lawyers my age who simply cannot afford to retire completely — especially those with a second family.
What advice do you have for sole practitioners, who are perhaps in their 50s and may be some years away from retirement, for how they can start planning now to make the transition to retirement smoother later?
Again, get a good accountant and do some planning for the future. Get rid of as many sets of keys as you can. By this I mean get rid of condos, cabins, boats, planes, cars, etc. Every set of keys carries with it numerous expenses, including maintenance, insurance, financing, etc. Simplify your life.
How have you enjoyed retirement so far? Any highlights?
I had expected to enjoy retirement and I have. I like working around the house and I have many interests. We travel a fair amount. We find that we don’t need many things, so we can afford a few luxuries. We have more big-screen TV sets than anyone should have. After a working life of 45 years, I find the freedom from the demands of employment to be the best thing.
Is there anything about being retired that surprised you?
I think that the lawyers who had no life before retirement are the ones who will have the most difficulty. One that comes to mind told me that he would not know what to do if he retired, so I guess he will die at his desk.
I get up early and try to be at the gym every morning between 6 and 6:30 am. I get the Globe and Mail, which I read during cardio and then return home to my computer where I trade any stocks that need trading. I am finished by 9 or 10 am, at which time I watch three news channels and three business channels. I then head outside to do yard work or inside to do handy work. I have lunch and then a nap. Afternoons are either more yard work, a walk, cycling, or whatever comes along. It seems a short time before 4:30 when I quit for the day.
I do a lot of reading and have found the wonders of the public library. The internet is a constant source of information and entertainment. I have a box that allows me to record TV shows that always seem to be on at an inconvenient time. I love it.