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How Will You Spend Your Time in Retirement?Submitted by Flourish Wealth Management on May 30th, 2017
By: Kathleen Longo, CFP®, CAP®, CDFA
When the time comes to retire there can be mixed emotions. On the one hand you are excited, right? Most people approaching retirement have worked diligently for four or five decades and the prospect of switching up that early morning, five day per week routine is certainly something to look forward to. On the other hand, feelings of apprehension can arise when you think about all that time. What if the things that you’ve looked forward to in retirement aren’t enough to sustain you?
According Stewart Friedman, practice professor of management at Wharton School of Business at University of Pennsylvania and founding director of the Wharton Work/Life Integration Project. “The questions people ask at earlier stages of life become more profound at these later stages,” he says. “Am I living the life I want to live? What is most important to me? Who is most important to me? You see the end, and so you think about what you want to do with the time that you have remaining. There is the question of: now what?”
As you enter your golden years, the great paradox is that there is so much time, and yet so very little of it. At least that is the feeling that many people have. The reality, however, is that people are living longer, healthier lives. When you close the chapter on your professional career, you are opening a new chapter that can provide another 20, 30 or more years of experiences and memories.
A thirty-year time horizon can feel daunting for many people. First comes the question of whether you have saved enough to last you that long. Next is the question of how you will occupy all that time. I like to help clients put things into perspective, look at the time in increments, and then make sure their nest egg is aligned with their plans.
When people retire they often go through a sort of honeymoon phase where they are full tilt with all the things they wanted to do when they were working, but couldn’t due to time constraints and other obligations. While it is wonderful to dive right into your new life stage, it is important to pace yourself with all those plans.
When we work with clients to plan for retirement it isn’t just about money. We talk about what they want to do, set goals, and develop a strategy for an engaging lifestyle through the various stages of retirement. We have found that those who have constructed a well thought out plan for how they will spend their time are happier and experience a better adjustment to retirement.
Money is not the panacea for a successful retirement. It will be important to have enough to satisfy your needs and provide a buffer against major health issues and unexpected expenses, but budgeting for your time and happiness can be the more challenging task.
Having a financial plan is absolutely necessary, but having a plan to stay engaged and productive is paramount as well. Research shows that people who maintain active and healthy lifestyles in retirement live longer and happier lives. Aging well and aging gracefully should be part of your goal in retirement.
When you are considering what your retirement plans will be, I recommend doing a realistic self-assessment of what you like about your career and what you might lose when you retire. This can really help you hone in on some of the activities you may choose to pursue when you retire and it may inspire creative ideas that you may not have considered before.
There is always traveling, spending more time with family, grandchildren, friends, etc. But those activities are typically short term. You may spend the weekend with old friends, or a week with the grandkids, but there is still the day-to-day that can go overlooked. Is there something about your community that you’d like to see change? Do you see an opportunity where you could teach people a skill that you have? Is there a group or a person that you’d like to help? Is there a hobby you have that, with enough time, could be a small business? What aspects of your job will you miss and are there ways to continue to perform them in a different capacity once you leave?
Asking and answering these types of questions can help you identify opportunities to fill your time with substantive activities and experiences with a sense of purpose.
If you aren’t sure what your retirement will look like, you might consider a phased retirement arrangement. Over the course of the last decade more and more companies are offering the option of a phased retirement.[ii] In some scenarios you can continue at your job on a part time basis or in a freelancing capacity. In other cases, people are staying on as mentors to new recruits, providing valuable knowledge and expertise to those beginning their careers. There are several benefits to these types of arrangements: You stay socially engaged, your mind stays more acute and alert, and you have plenty of free time to explore other opportunities. Having some additional income doesn’t hurt either.
Encore careers, or “seconds acts” as they are also called, have provided many retirees high job satisfaction. In fact, many people who have embarked on a new career in retirement have said that they had more satisfaction than in their previous career.[iii] This makes sense in many ways because you are able to use your human capital –the experiences and skills that you developed over the course of your life and career – to apply it to something new and, perhaps, something that is more aligned with your passion, creativity, and values.
Some people may be reading this and thinking, “Nope, I do not want to replace my job with another job. I want to wake up at 9 AM, read the paper, play 9 holes of golf, have an early dinner, watch Jeopardy, and get an early night. On the weekends, I want to spend time with family. I want to take a couple of vacations each year, and that’s that.”
To this I say, “Bravo!” You have a well thought out plan for how you want to spend your time in retirement. Not everyone needs to start a small business, become a community organizer, or volunteer at the local animal shelter. There should be no expectation to get out there and “do” just because you have the time now.
The point is to have a plan for what your next life phase will look like. If you are told you’re retiring tomorrow and you have no idea of how your days, weeks and months will look, that would be a cause for concern. Just as with finances, planning for retirement far in advance will benefit you most in the long-term.
The fact of the matter is that there is no one-size-fits-all solution to retirement. No one made a rule book or a manual. Retirement can take many forms and what is right for one person is not necessarily right for another. There are many different ways that you can be successful in retirement. Considering how you define success and happiness is an important first step to identifying your retirement goals and plans.
We are always here to help you plan for the future and find peace-of-mind in life’s journey. For a consultation on retirement planning or any type of life planning, please feel free to contact us.