Financial planners and most of the financial press tend to focus on the financial aspects of planning for retirement. Are you saving enough money? Will your savings last through the end of life expectancy? Optimal Social Security drawing strategies, minimizing income taxes after retirement, etc. These are all important retirement planning topics and deserve our attention. However, there are other important aspects of retirement planning that don’t involve money or income taxes.
Have you pictured what your life will look like when you no longer need to go to work? Perhaps you see yourself traveling, playing golf, gardening, spending more time with family, taking care of those projects around the house that have been put off because you didn’t have time. Visualizing life after work is a very important part of planning and deserves just as much thought and attention as counting the nest egg. Researchers have learned that many people continue to work into their 70s because they have no idea what to do with their free time. There is nothing wrong with continuing to work if you love what you’re doing. In fact, I believe that should be the goal – to spend more time doing what you love to do.
While visualizing what you will be doing in retirement, you need to think about who you will be doing it with. Human beings are social creatures and we need to interact with people on a regular basis. Many people develop strong social ties to their colleagues at work. Retiring could mean losing or significantly reducing contact with a large part of your social network. Those in this situation should work on developing friendships outside of work who have similar interests.
No discussion about social contact would be complete without considering what retirement will mean to your spouse and family. Things will change around the home whether your spouse is already retired or still working. Take time to communicate openly before retirement to make sure you are giving each other enough time and space to pursue individual interests. When does your spouse want you to retire? Make sure you are both on the same timeline. The first year of retirement can be a difficult transition for both of you as you find your new routine.
Many people find the most difficult part of adjusting to retirement is the sense of time. Transitioning from a lifestyle with deadlines and where every precious minute cannot be wasted can create a different kind of stress. The only deadlines now will be the ones you set for yourself. How are you going to handle a more relaxed schedule where days are not measured by how much you were able to get done? You should still have goals and keep track of things you want to accomplish. This should be part of planning the first year in retirement. What destinations are on your travel list? Are there organizations you want to get involved with and how much time can you give them? You don’t want to plan every minute of that first year. This should be more about enjoying the journey.
What about continuing to work? Do you love your job? Do you really enjoy your colleagues and coworkers? Does your employer want you to stay? Does your spouse mind if you put off retirement for a few more years? By all means you should keep working. It’s tough to walk away from a long-time career. There’s the prestige of an authority position that will be greatly missed by some. There may be projects that you want to see through before stepping aside. You may want that sense of accomplishment one more time so you can go out on top.
Finally, some potential retirees may be able to wade into retirement by transitioning to reduced hours or hiring themselves back to their former employer as a consultant. Many people receive a big chunk of their identity from their job. It may take a little time to redefine yourself. Those who don’t have an answer to that question can keep working on a more limited basis while they finish working out what their life in retirement will look like. You should start talking with your employer now to determine if this is even an option for you. Have others in your company pursued this path? How did it work out for them? How long did they continue working part-time until they were retired full-time?
It’s easy to think and dream about retirement. In some ways it’s even easier to figure out all the financial projections associated with retiring. When it comes time to do it, you need to be prepared for the time you’ll have on your hands and how you will pursue happiness without your career. There will naturally be feelings of anxiety and fear involved with letting go. Setting new goals for your life after retirement can replace those feelings. Moving towards new goals will help transition to this next chapter in your life.
- Many people continue to work into their 70s because they have no idea what to do with their free time if they retire.
- Discuss retirement plans with your spouse to make sure you are both ready.
- Put some deadlines if your retirement plans for the first year to keep a sense of accomplishment in your life.