August 12, 2016
Retirement – 2 Dimensions
As I have talked about previously, there are numerous dimensions surrounding financial decisions – two of which are the mathematical and emotional. For a retirement plan to be truly healthy it requires some level of financial freedom (math) as well as purpose (emotional) – as I touched on last week.
Prospective retirees and financial advisors often place great emphasis on the math – where is the money going to come from? Previous thinking focused mostly on pension and social security; however sources such as IRAs, Roth IRAs, and other forms of retirement accounts also come into play. Evaluating retirement becomes life’s most important math problem, including the complexities of expected investment returns, risk factors, and income tax.
While analytical tools work for numbers, it is nearly impossible for them to factor in the emotional aspects of retirement. These tools can help us portion out our resources in order to support healthy, enriching, and enjoyable lives when we are no longer bringing in a salary. Yet, there are still plenty of retirees, with ample financial resources, who don’t find retirement wholly satisfying. Learn from this and consider the following factors so you can go beyond the numbers.
A survey I read recently asked 100 people what they would do more after they retired, 99 of those said they would travel. Not business travel, but embarking on a journey to experience new and exciting cultures. Whether it’s cruising around the Mediterranean or a trip to Disneyworld with the grandkids, the planning and execution adds fulfillment, purpose, and excitement to a well-deserved retirement.
Know How You’ll Fill Your Days
While employed, nearly half your week is spent at work, but once you retire you will need to find something to fill that additional 50%. There are numerous hobbies to engage in and enjoy once you no longer have work to consume your week, but it is difficult to fill your days without a plan.
Cultivate a Sense of Purpose
When you’re working, at least part of the purpose question is answered – you are working for your employer (or if self-employed for your clients/customers) in order to add value to the company. But, hopefully, your purpose goes beyond this into the realm that you harbor a belief that you’re improving the world around you. That being said, for most in retirement, part of life’s purpose goes away, which can pose a serious threat to their health – both physical and mental.
Recent studies, of those in retirement, have shown that having a high sense of life purpose or usefulness to others resulted in a significant reduction in mortality and cardiovascular conditions. And I would dare to take it one step further, suggesting that those with a sense of purpose not only live longer and healthier lives, but happier ones, as well.
Nurture a Social Network
Many of us rely upon the workplace for social connections. These may be strong ties, such as people who we have exercised or lunched with for years, or they may be relatively weak ties between people whom we share a quick hello or UofM/MSU banter. Both types of connections are important to happiness and will likely ebb once you wind down your career. And for most of us, our spouse is not enough in terms of the variety and richness of interaction, as well as having that support if we survive our spouse. So, start building social networks outside the workplace now.
Guard Your Health
It doesn’t matter how many millions you have amassed if you don’t have your health. I was at a conference recently and saw one of my mentors who is 83 and just suffered a health setback. It can happen to all of us and, in my opinion, the best way to minimize this risk is prevention. Of course there are certain genetic factors that cannot be helped, but having positive exercising, eating, and sleeping habits that begin while you are still working can propel you to an enjoyable retirement.
Notice that a minimum of three of these factors could be partially addressed by still working, at least part-time. For many, full-retirement (and its association with having your feet up on a chair) is not the desired end. Working, in a career you love at your desired intensity, could help benefit you both financially and mentally as you live out your “golden years.”
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