My mom and I are not phone people, but as we live a few states apart, it’s how we keep in touch. What’s amazing is how many activities she has to report on when we catch up. She has a weekly hike with her friend, takes solo walks each morning, babysits my brother’s kids, volunteers as a dog walker for the ASPCA, participates in letter writing campaigns, and knits beautiful sweaters, hats and mittens for the League of New Hampshire Craftsmen. She’s a powerhouse. And she’s 79. My mom spends her time doing what she loves and what’s important to her. That’s what I would call a successful retirement plan.
Two keys to retirement planning.
When people think of retirement planning, they usually think about how much money they’ll need. How will inflation affect my savings? How should I revise my portfolio when I’m no longer drawing a salary? What will Medicare cover and what additional coverage will I need to buy privately? These are important questions that require careful analysis and a comprehensive strategy. But a question that’s just as important is, how are you going to spend your time when you’re no longer going to work?
Misconceptions about work and free time.
Many of us view work and retirement as diametrically opposed. “Work” is composed of complex, time sensitive tasks, stress, long meetings and short weekends, and “Retirement” is an idyllic paradise of travel, lunches with friends, and total freedom. While there is some truth to both, they are outdated concepts that don’t really ring true. Being a professional means you’re so good at what you do that someone will pay you to do it. Work assigns real value to your talents, and provides an environment rich with opportunities to employ your skills, socialize with peers, and continue learning and honing your abilities. These are all vital components in determining how we see and value ourselves. The reality of retirement is that the social interactions, intellectual challenges, and validations of self-worth you took for granted fade away with the responsibilities of work. Retirees are often left with too much free time, and not enough meaningful activities. Those who don’t maintain productive routines or have goals they’re working towards often default to watching TV between meals.
Focus on life planning.
Before you dive into the financial side of retirement planning, focus on what you want your lifestyle to be. The first few weeks of retirement will likely align with the common conception of fun, carefree days, but the novelty of golfing on a Tuesday and not setting your alarm will wear thin quickly. You need to have plans and goals to make this next phase of life meaningful. Some life coaches recommend creating a schedule for yourself with activities mapped out for your day, much like you had at work. Exercise, taking classes, volunteering, reading the books you never had time for. Be thoughtful, and identify things that you care about and will allow you to keep growing. If nothing jumps out at you, consider an interest you once had, but that fell to the wayside. Perhaps playing an instrument or writing a book. Anything is viable if it’s meaningful to you. The value of being intentional is that by making plans and staying on track, you add purpose and achievement to how you spend your time, and put yourself in control.
The value of being intentional is that by making plans and staying on track, you add purpose and achievement to how you spend your time, and put yourself in control.
Malcolm Gladwell famously said that to become a master of anything, you have to spend 10,000 hours perfecting your skills. The average human life can be split into 4 quarters, each with 8,000 days. That means in retirement (the 4th quarter), you should have plenty of time to master any skill or activity you set your mind to.
Your lifestyle will determine how much you need to save.
People often want to know what their retirement number is. What they fail to realize is that you need to have a clear understanding of what your retirement will consist of first. Are you an avid golfer? Do you plan on taking a European vacation every year? Are you going to sell your house and purchase a condo by the beach? These are big picture questions that will play a significant role in determining what your expenses will be. But so will the daily pursuits that fill the empty spaces created when you leave the workplace. To contribute to your community and stay socially active, will you volunteer at a favorite charity? To stay engaged professionally and leverage your expertise, will you mentor students pursuing a similar career? To continue defining who you are, will you write your memoirs and connect with future generations? Planning how you will spend time in retirement provides the detail necessary to project how much money you’ll need to save. And being intentional and setting goals will help ensure that your time is well spent.
You’ve worked hard to achieve success professionally and to build a nest egg for retirement. The next step is to focus on yourself (gasp!) and determine how you want to enjoy this next phase of life.
If you’d like to discuss your plans for retirement, reach out to one of our fiduciary advisers. We’d be happy to talk through your plans to see how we can help.