You’ve done the planning. You’ve crunched the numbers. Recent stock market movements have carried you over the top, assuring you of a worry-free retirement (hopefully!), but you can’t bring yourself to pull the trigger. Did you ever think you would have to be dragged kicking and screaming into retirement? Well, you’re not alone. Welcome to the “new normal” retirement.
It's Not Your Father's Retirement Anymore
Traditional retirement planning looks at retirement as a specific point in life where you stop working and saving excess income and start spending your savings as you are no longer earning an income. This actually may have sufficed at a time when people worked for 40 or 45 years and then retired for a few years of leisure. However, today’s retirees realize they might have two or three decades of life ahead of them. In a practical sense, retirement is no longer a short period at the end of life, but rather a whole new phase of life itself.
When the planning focus is purely on financial issues, it tends to reduce retirement to a financial milestone. When you cross the finish line on time and on goal, your planning is done and you should expect to enjoy a successful retirement. However, it is no longer enough to know how much you will need to live comfortably in retirement; today’s retirees need to know how they will be able to make the most of this new stage of life.
As the “new normal” sets in, a more holistic approach to planning is required that will prepare retirees, financially, psychologically, mentally, physically, and spiritually for the life cycle of retirement. The evidence is overwhelming that the more prepared people are, mentally, physically and financially, the happier they are in retirement.
Retirement is As Much About Quality as It Is Quantity
One service I offer as part of my Wealth Management Services is “Life Planning”. Effective life planning does not ignore the financial components of planning; rather it places them in a more important context. This makes it easier to prioritize your needs and wants while allocating money and time to achieving them. It does require that you have a keen understanding of your current financial situation in relation to your goals, and that you are always aware of the gap between where you are and where you want to be. The steps you take towards closing those gaps will consist of thoughtful and introspective decisions as well as sound financial management.
As much as the perception of retirement has changed over time, the concerns and questions remain the same for most people. Will I have enough to live comfortably? Will my money run out before I do? These are questions that can’t be ignored; however, life planning is a process of discovering your life’s purpose and then implementing specific steps to achieving it. As such, it follows a line of questions that many people have never really considered, such as:
- What are your values? What beliefs and attitudes do you hold regarding family, health, and service to others? Why are they important to you?
- What would you want to be able to say about yourself at some point in your retirement? What would you expect other people to say about you?
- What are your vivid and compelling wants, and why are they important to you?
- What have you and your spouse (or how have you as a couple) “pulled” together to create a shared, values-based vision of life?
- If you were to retire today, how would your values and attitudes translate into actions? What activities or type of lifestyle would enable you to live your values?
What's Your Retirement Ambition?
The prevailing attitude among a growing number of pre-retirees is that they aren’t going to limit themselves by trading a life of work for a life of leisure; rather they are going to take control and trade in work that they no longer want to do, for work they will really like to do.
When the focus shifts from standard of living to quality of life, there is a greater chance you will be able to achieve the things in life that have a more enduring impact on your health and well-being. Quality and not quantity, should be the goal in retirement. It should also be a time of regeneration, but that will ultimately depend on whether you have a clear ambition for the rest of your life.
If you’re not sure how to get there or find out what your life’s ambition is, we can work on that together.