Many of my clients who are newly into retirement tell me that one of their greatest surprises is the realization of how little thought they have given to how they will spend their time. After all, we spend our lives working and saving, planning for the day when we can stop the nine-to-five grind and spend our time on what is most important to us. But all too often, we still get caught up in the financial planning and strategy and forget about everything else that contributes to quality of life and real enjoyment of all that free time that we now have on our hands.
The World Health Organization estimates that a 60-year-old person living in a developed country today can reasonably expect, on the average, two decades or more of a healthy, active lifestyle. Clearly, advances in healthcare have made it possible for more people to enjoy more years of retirement than ever before. This means, then, that it is more important than ever for retirees to know, not only how they will pay for their retirements, but what they will do to make those years count.
This comes even more clearly into focus when we realize that, according to research, retired people are much more subject than other segments of the population to loneliness, boredom, and other emotional factors that can negatively affect their quality—and quantity—of life. A well-rounded retirement plan, then, needs to go beyond the financial forecasting and calculations of needed income to answer questions like these:
• How can I stay involved in causes and undertakings that matter the most to me?
• What will I do to make sure I remain productive and validated?
• Who am I going to need to care for?
• Who will care for me?
• Where should I live?
• What gives my life purpose?
• What am I most enthusiastic about?
It has often been said about retirement, “You can only do so much fishing, golfing, and reading.” This truth lies at the heart of a holistic retirement plan that goes beyond financial considerations to include life priorities. Asking yourself questions like those above—preferably, in advance of the day when you stop going to the office—can aid you in making a smooth and assured transition into a secure and satisfying retirement.
Four Phases of Retirement
It also helps to know which phase of retirement life you occupy. According to the AgeLab at MIT, most retirees can be generally grouped into one of four phases:
1. The Honeymoon—active and involved retirees may continue to work part-time or even launch a new venture;
2. The Big Decision—work is phased out as retirees focus more on where they want to live and whom they wish to spend time with;
3. Navigating Longevity—health issues begin to dominate, along with associated housing and transportation considerations;
4. The Solo Journey—loss of spouses becomes more common, along with increased feelings of boredom and loneliness.
Each of these phases calls for different levels of resources and different priorities for spending. Knowing in advance that your retirement is likely to encompass one or more—or possibly all four—of these phases will help you make a plan that is more likely to get you where you need to be, no matter which phase you find yourself in at any given time.
Stay Diversified, Stay Your Course!