Planning for retirement starts with a good financial plan, and the earlier you get started, the better. That gives you time to make sure you are on sound financial footing, and enables you to begin planning for how you want to live your life once you retire. A key to a happy retirement, along with economic security and good health, is finding purpose and identifying those things that will be interesting, fulfilling and meaningful to you once you leave a full-time job.
The retirement transition can be both exciting and scary. For those of us who were absorbed in our work 24/7, we won’t miss the daily grind, and will look forward to sleeping in and finally controlling our own schedule. On the other hand, a job provides some intangibles we may not have thought of — collegiality with co-workers, a daily routine, the satisfaction of being “in the game” and a sense of identity.
Think about it. In the United States in particular, when we meet someone, chances are we identify ourselves by our work. Once we stop working, we need to ask ourselves a basic question: “Who am I without my business card?” Retirement gives us an opportunity to find that out, so why wait? Start developing your own “purpose plan” now.
Why a purpose plan is important
Around age 50, there’s a subtle shift in our thinking. According to adult development literature, we begin to realize we are at life’s midpoint (assuming we live until age 100) and we start focusing on the finite time left, not on the infinite time ahead like we used to do when we were younger. Looking at it from a life stage perspective, and knowing we have less time ahead of us than behind us, it’s logical to think more seriously about what’s most important, what gives us joy, what will get us up in the morning and what will give us a sense of purpose as we move into the retirement years.
There’s another reason for including purpose planning in the retirement planning process. With longevity rates where they are, it’s possible we will be retired for 30 or more years. With so much time on our hands, we need to protect ourselves from loneliness, social isolation and feelings of uselessness. Those who are not engaged socially and feel life has no meaning can sink into depression and can develop health conditions that could possibly lead to premature death.
Options and possibilities
As you plan for retirement, it’s important to care of finances first — reviewing an investment strategy, replacing a paycheck with a steady stream of income, protecting against health and long-term care events. Then it’s time to start developing your purpose plan. Purpose planning and financial planning go hand in hand because your ideas about the next stage of life are very likely to have financial implications. Think about it like taking a trip. You are leaving full-time work behind and moving on to a new adventure. The past is familiar, the next phase is unknown.
Pre-retirees often say, when asked, that they expect to travel more or to play more golf. Planning usually stops there, but after 2 years or so, they may wonder if that’s all there is to life. There are other, more lasting options to think about in advance of a retirement date.
- Working. Continuing to work as a consultant or part-time, or changing fields altogether is often a part of the new vision for retirement. For some, work provides satisfaction and, considering longer life expectancy, also helps assure a secure financial future with money to spend on extras.
- Starting a business. Three in 10 entrepreneurs are age 50 and over. Entrepreneurship appeals to some retirees who have a business idea, and finally have a chance to pursue it. Some businesses are more ambitious; others are modest and might involve taking a hobby online.
- Continuing education for new skills. Pre-retirees can prepare for new opportunities, whether paid or volunteer, by taking classes online before or after they retire. Brushing up on computer skills or learning consulting basics to prepare for what’s next is a smart idea.
- Physical and mental fitness. Maintaining good health is critical to aging well. Getting better at a favorite sport, taking classes in yoga or dance, and building in a daily exercise routine all contribute to staying sharp and keeping fit. Lifelong learning programs offer intellectual stimulation and opportunities to meet people with similar interests.
- Community involvement. People older than age 60 have talent and experience developed over a lifetime, and studies find they want to use it to give back to their communities and to society. With so many needs to fill, serving on boards, mentoring teens and advocating for cleaner environments are just a few of the possibilities.
- More time with family and friends. Connections with adult children and grandchildren become even more meaningful as we get older. Retirement offers more opportunities to spend time with the family, take and pay for intergenerational trips, and help out when needed.
- Pursuing a new direction in life. Some people have dreams they left behind when they started their careers and raised their families. Now it is their time to do something they always wanted to do, whether to start a musical group, learn a language and live abroad, or get more grounded with their own spiritual development.
- Preparing for very old age. The hardest part of a purpose plan is thinking about your very old age and your legacy. It includes considering what will be most meaningful to you if you are less able to get around. Some serious thinking about the values you hold and how you want to be remembered by the next generation can influence what you do in your earlier retirement years.
The COVID-19 pandemic has upended our daily life and probably has influenced our work and retirement plans, too. Looking at the positive side, however, it also has offered us a new window to get our finances in order. It also gives us a chance to reevaluate how we are living our lives now and what, if anything, we should consider adjusting for the future. With more time on our hands and a subtle shift in our focus, the stars are aligned to rethink what retirement should be about and how we can make the most of it.
GE-3126014 (06/2020) (Exp. 06/2022)