One of the more important—and hopefully enjoyable—events you will face in life is retirement. After spending many years building your career, you have likely accumulated a comfortable nest egg. If you have reached a point where retirement is the next big step, you need to develop a strategy that will help you cross the bridge from the world of work to the world of leisure.
While most retirement planning discussions focus on the financial aspects of securing a comfortable retirement, few look at the nonfinancial issues that need to be addressed. Indeed, when retirees report being dissatisfied with retirement, it is more often the nonfinancial aspects they find troubling. Specifically, lifestyle changes and loss of self-esteem due to loss of work often create the most difficulties.
Perspective is Key
Maintaining perspective is really the key to enjoying one’s later years. While the word “retirement” suggests that something is coming to an end, cultivating a more positive view can help you learn to see retirement as the beginning of a new phase of life—a phase in which you can do all the things you never seemed to find the time for while you were working. Volunteer work can enhance your sense of making a contribution, while taking courses in areas of special interest can challenge your intellectual curiosity. If thoughtfully chosen, these activities can bring a great deal of happiness and meaning to your life.
Easing the Transition
From a psychological standpoint, some individuals find that separating from a lifetime of work is a more emotional experience than they ever expected. It is possible that it may take from two to five years to disengage from the personal investment required of work-related activities.
One solution for dealing with these stresses is to slowly phase into retirement. The fact is, many individuals wouldn’t mind continuing to engage in some form of work, either by consulting, job-sharing, acting as a mentor, or providing back-up management. Mentoring, in particular, enables an individual to transfer his or her lifetime of learning and experience to a friend, relative, or younger colleague. Also, phasing into retirement can provide an “anchor,” while offering the opportunity to explore other activities.
Obviously, it’s a lot easier for retiring individuals to pare down their work schedules and begin considering other pursuits if financial considerations play a secondary role in deciding whether, and how much, to work. Some people believe it costs less to live in retirement, yet many retirees may actually increase their expenditures, especially in the early years. This is when individuals in good health may spend more on entertainment, dining out, travel, and recreation than they did while still working full-time.
During your working years, it is common to take your lifestyle for granted. During retirement, with more time available for reflection, it is both appropriate and wise to carefully examine how you have been living and to consider reordering your priorities. You may find you just don’t need to do some of the things that seemed so important when you were working.
On the other hand, if you wish to maintain your pre-retirement lifestyle, you may need to consider your financial position carefully. The best approach is to prepare a budget based on your adjusted income level and update it on a regular basis. You will also need to keep an eye on inflation. At a 3 percent annual rate of inflation, an item costing $100 at age 65 will cost $156 at age 80. Your ultimate aim is a retirement plan that will not only work for you “at” retirement, but will also carry you “through” retirement.
If you view retirement as an opportunity for exploration, you can help make this transition an exciting and enjoyable process. Your horizons are limited only by the bounds of your imagination. Through your hard work, you have earned this opportunity—enjoy the journey!