Transitioning into Retirement

I hate this “official” definition of retirement.

And it’s not just the dictionary that thinks of retirement this way; most people view it this way too.  My issue is that it makes retirement sound like the end of possibilities when, in truth, it is the opposite.  I choose to define retirement as the time of your life when you do things because of want and not need.  You don’t have to stop working to be “retired”, like George Jones famously said: “My body’s old but it ain’t impaired.”  But the reason for you work may change.  Despite the opportunities, there are issues with transitioning from working a 9-to-5 job to choosing to do something different.

A couple days ago we had a meeting with a couple that wanted to work with our firm.  The husband, we’ll call him Joe, recently sold his interest in the company he started.  Part of the agreement has Joe working for the next few years to aid with the ownership transition.  When we asked how that was going, Joe responded that while no one was treating him differently, he felt different.  This was not the first time we heard something like that.  Our experience has shown us two things with the recently- and the about-to-be retired:

                   1) They are surprised by the emotional adjustment needed, and

                   2) They think this reaction is unique to them.

People who have saved and planned for years are just as likely to have this reaction as people who have not prepared.  There are countless hours spent discussing how to save for retirement and many hours (not as many) towards discussing how to create income from that saving.  Unfortunately, there is little effort dedicated on emotionally preparing for retirement.  

The mental benefit we get from working is frequently overlooked.  Whether it is a sense of purpose or achievement, social interaction or even simply passing the time, people get an emotional boost from working.  Two of the risks we discuss with clients, Frailty and Elder Abuse, can be partially offset by the increased social interaction you get from working.  Now, if you are unhappy with your job/boss/co-workers, the negatives may outweigh the positives, but the positives do exist.

In developing retirement plans for clients, most advisors will ask about goals and wants to make sure they will be funded.  We then take the next step and talk with our clients about their hobbies and daily activities to help prepare for the adjustment period that is coming.  Obviously, we are not saying what they should do with their time; our goal is to help clients understand that while playing golf (or watching TV) every day may sound fun, doing it every day for the next 30 years may get boring.

When we are kids, we have the time to do what we want, but not the resources.  When we are adults and working, we may have the resources but not the time.  Retirement is that perfect time where, with planning and good health, we can have both.  So, we encourage you to think of the mental aspects of retirement, and not just the financial, when plotting your #2ndHalfPlan.

Do you worry when you see a drop in the market? Shoot me an email at info@afmgplanning.com and let me know what you think. If you also have any questions or would like to talk to me you can access my calendar here to schedule a phone call when it’s most convenient for you.