Adobe Stock
Retirement. The one word alone conjures up a lot of different feelings and emotions for people. For some, it signifies fear. Fear of not having enough money, fear of running out of money, or just fear of the unknown. For others, the word “retirement” signifies a pleasant new chapter in life, one with far more freedom.
John Loyd
When a client is planning to retire, I often ask, “It’s Monday morning after you retire, what are you going to do?” The knee-jerk answer is almost always the same one-word enthusiastic response, “Nothing!” I then repeat the question, “I’m serious. Let’s say you retire on Friday, Monday morning rolls around, what are you going to do?” It’s at this point that one can often see the gears spinning in the person’s mind, as they candidly have not given much thought to what they are going to do once retired. Cue the old adage of “If you fail to plan, plan to fail.”
Without a plan during retirement, time can click on, and one can find themself looking up a few years from that coveted retirement date with a sense of uneasiness. One realizes that retirement is NOT the commercials or images that the media portrays. It’s not all sipping coffee from the cruise ship balcony, spending weekends at a vineyard in Napa, or playing golf overlooking a gorgeous blue sea. There are still the day-to-day issues of life to deal with. Health issues, the AC unit going out, getting the oil changed, issues with grown children, and the overall worries of the world that the media constantly reminds us about.
The issue is, even with plenty of money, some people are going to fail at retirement. How is that possible? How could one “fail” at having to do, well, nothing? What some retirees fail to realize is that “work” provides a benefit of more than just a paycheck. While it may be subtle, work provides:
- Mental and physical stimulation (even if not doing manual labor, one is still walking into and around the office)
- A sense of purpose
- Social connections
My thoughts here are not to undermine for one second the glory and enjoyment that retirement can bring, nor to imply retirees are all just sitting around bored and watching TV all day and doing nothing with their life. My point is more that if you want the best that retirement has to offer, in that phase of your life, it’s important to figure out ways to fill the gaps that a work environment formerly provided. Shakespeare said, “Leisure is a beautiful garment for a day, but a horrible choice for permanent attire.”
How To Win at Retirement
- Pension like income: Who are the happiest retirees? Those who have pensions and are not constantly worried every second of every day about what the stock market is doing to their retirement portfolio. The issue is, pensions are very rare these days, but there are financial products out there that can provide pension like income, meaning a stream of income that one cannot outlive.
- Part-time something: Whether volunteer work or getting paid, the goal is to keep the mind and body active while having social connections.
- Be deliberate about time with friends and family: Think, “What gets scheduled gets done” and hence, “What doesn’t get scheduled doesn’t get done.” Schedule a monthly coffee or breakfast with colleagues from work (or other retirees from where you worked), commit to attend the family reunion (or host one yourself) and various family events throughout the year, or host a yearly event at your house (Christmas party, etc.)
- Start doing things you want to do in retirement before you retire: Want to learn to play the guitar/piano/speak a foreign language? Start taking classes before retirement as it’s far easier to continue on a path than to start. Want to work part-time somewhere? Go speak to the manager where you might want to work and try to get something planned ahead for when you might start. We are creatures of habit, and how your first month of retirement goes, there goes the rest. What often happens is a person has a perhaps legitimate desire to “do nothing” but then flips on the TV, and before you know it, has spent three- or four-hours watching TV that day. Next day, well, same thing. The person looks up five years from now and says, “Where did all the time go?” and has barely pursued any of the “things they were going to do” or “bucket list items” upon retirement with all the “free time” they were going to have.
- Have a plan: How do you envision your life in your 60s, 70s, 80s, and 90s? What is it that you are retiring from? What is it that you desire to retire to? It’s the Monday after you retire, what are you going to do? What does the day look like? How will you know if you “succeeded” in retirement? How will you know if you failed?
The bottom line? Retirement is what you make it. Money helps, but purpose sustains. Before you hang up your work hat, take time to think about what’s next. What will get you out of bed on Monday morning, and what will make the days meaningful? With the right planning, both financially and personally, you can strive to make sure your retirement years are some of your best yet.
John Loyd, CFP®, MBA, EA is founder of The Wealth Planner™. For over two decades, he has been providing wealth management advice to small-business owners and high-income professionals. Contact him at [email protected]. Securities & Advisory Services offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC.