Retirement planning is not only about the money. Your degree of happiness in your “second act” may depend on some factors that don’t come with an obvious price tag.
What will you do with your time? If you are someone who has been working 40 to 50 hours per week for the last 30 years, you haven’t had to worry about how to fill the hours of the day. Chances are, you’ve scurried around from sun-up to sun-down trying to cram as much as you can into each and every day. When you retire, all of that comes to a screeching halt. Suddenly, you have tons of hours to fill each unstructured day. That may not be best for your mental and emotional health.
In our experience, it is wise to have a plan for how you will fill the hours. We encourage clients to arrange volunteer work or part-time work in advance of retiring. An EBRI retirement confidence survey shows that almost 74% of retirees plan to work for pay, whereas just 27% of retirees report that they’ve actually worked for pay.
What will be the structure of your day? If you’re used to a tight schedule and structure, suddenly having no schedule or structure can be difficult. Retirees may need to create a routine around the things they love to do. Scheduling workout days and times, standing lunch meet-ups with friends, or joining a book club or a golf league creates structure and provides things to look forward to.
Who will you spend your time with? Many of us create our social life around our place of employment. Our golf buddies are coworkers. We go out to lunch with people from our department. You must remember that when you retire, you’re going to leave that social routine behind. You may wish to consider beginning to build relationships outside of work prior to retiring to help facilitate the adjustment.
Where will you live? If you can surround yourself with family members and friends whose company you enjoy, in a community where you can maintain old friendships and meet new people with similar interests or life experience, that is a definite plus. If all of this can occur in a walkable community with good mass transit and senior services, all the better. Moving away from the life you know to a spread-out, car-dependent suburb where anonymity seems more prevalent than community may not be the best decision for you.
How are you preparing to get around in your eighties and nineties? The actuaries at Social Security project that the average life expectancy for men is 84 years old, and the life expectancy for women is 86.5 years. Some will live longer. Say you find yourself in that group. What kind of car would you want to drive at 85 or 90? At what age would you cease driving? Lastly, if you do stop driving, who would you count on to help you go where you want to go and get out in the world?
How will you keep up your home? At 45, you can tackle that bathroom remodel or backyard upgrade yourself. At 75, you will probably outsource projects of that sort, whether or not you stay in your current home. You may want to move out of a single-family home and into a townhome or condo for retirement. Regardless of the size of your retirement residence, you will probably need to fund minor or major repairs, and you may need to find reliable and affordable sources for gardening or landscaping.
These are the non-financial retirement questions that no pre-retiree should dismiss. Think about them as you prepare and invest for the future.
Andrea L. Blackwelder, CFP®, ChFC, CDFA® and Joseph D. Clemens, CFP®, EA are the founders and partners of Wisdom Wealth Strategies. Their shared passion is simple: to bring financial empowerment, understanding, and peace-of mind to people who wish to improve their financial future, build wealth for their families, and achieve financial independence. Click here to find out more about how you can work with the Denver Financial Advisors at Wisdom Wealth Strategies.
"Wisdom Wealth Strategies, LLC is a registered investment advisor offering advisory services in the states of Colorado and California, and in other jurisdictions where exempted." This material was prepared in part by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates.