What do you think of when you read the word “Retirement?" Do you think of long walks on the beach or sitting around the table with your family? Maybe negative thoughts pop into head. Everyone has a different reaction to the thought of retirement. Many are excited about retiring, and can’t wait for the days of no more 9-to-5. Others can’t imagine what they will do once they retire. A client once told me the word retirement meant death to him, because every man in his family died within 2 years of retiring.
I have worked with numerous clients that are recently retired, and I hear common stories from them. The first week of retirement is great, but then they quickly become bored. They realize just how important work was to their life. Many peoples self-worth is tied to their job, and retiring means they lose their identity. S1omeone that was once a doctor is now just “Bob.”
A financial planner once told me the year after retirement is the second most dangerous year for a person, following only the first year of life. I haven’t seen data that supports this belief, but anecdotally I have seen this play out with clients. Most of us do not “prepare” for retirement, which makes the transition even more difficult. Here are some things you can do to help ensure you are ready for retirement when it finally arrives.
Make a calendar: Sit down with a weekly calendar and fill in what you would do during a hypothetical week of retirement. Fill in meals, time spent with family, and time for working in the yard. Most people find that they have an enormous amount of blank space during the week because they have 40+ additional hours they didn’t have before!
Build a social network: For many of us, our workplace represents our social network. Most of our friends are people that we interact with because of our job. Losing this social network at the same time you stop working can be devastating. Two to 3 years before you plan to retire, start building relationships outside of work. These friends will still be there after you stop working, and can be invaluable support as you transition into retirement.
Starting doing things you always wanted to: Don’t wait until you retire to start doing the things you always dreamed of. Do you want to start volunteering at the community center? Go ahead and start, even if it’s only one day a month. This will help you build relationships outside of work, and give you connections when you need to find more to do in retirement. It is much easier to simply increase the amount of time you work at the community center than it is to try and start right after you retire.
Plan to phase in: Would your employer let you slowly retire instead of doing is all at once? Maybe you could back off to 30 hours a week, take Friday’s off, or take additional vacation time during the year. Try to avoid retirement happening all at once. Ease your way into no longer working. This will also allow you to earn some additional income in retirement which can really help protect your nest egg.
Talk to your spouse: Many times, spouses haven’t discussed their goals for retirement. One may want to get in an RV and travel across the US, while the other wants to spend time volunteering locally. Open up the communication channels with your spouse so that you know what the other one wants. Together you can make a plan that is the ideal retirement for both of you.
It is important to understand that retiring is a very difficult transition, and shouldn’t be taken lightly. Try to make a plan to retire so that you are ready when the day arrives.
So what do you think? Are you willing to try any of these ideas? Have any others you would like to add to the list? Have you already retired and wished you had some of tried some of these exercises? Let me know in the comments section!
Alan Moore is a fee-only financial planner and founder of Serenity Financial Consulting in Shorewood WI. Follow him on Twitter @R_Alan_Moore. You can contact him at alan@serenityfc.com, 414-455-5313, or visit his website at www.SerenityFC.com. Want more education? Download your free guide to the “10 Easy Steps To Securing Your Financial Future Today.”
Great advice guys! ;-)