Easing into retirement

The other day, I was checking out an online calculator that was designed to tell me if I could retire.

It asked logical questions like, “How much do you have in savings?” “What age are you and what age would you like to retire?. “How much are you saving each month?”. Lastly, “How much will you spend a year in retirement?”

I came up a bit short. I imagine the following missing questions had something to do with the results:

Will you be receiving Social Security?
Does your spouse or partner have any savings?
Will you have any other income such as rental income or a pension?
Are you able to reduce expenses in retirement?
Are you planning on any part time work in retirement?

When we create a comprehensive financial plan for someone, we tend to ask a lot of questions to ensure we have all the information we need to make sure our clients will be able to live the life they want.

So, bear in mind, those online tools can be a good starting point, but they don’t replace the expertise of a good financial planner.

That being said, if you have gone through that process and it appears you are on track for a successful retirement, there is one more piece to consider for a happy retirement.

Money is important, but money doesn’t guarantee a happy retirement.

Quality of life

Fred is married. He is retired, and his wife works part-time at a pet shelter. He seems busier today than when he worked for a mid-sized company.

Initially, Fred did pretty much nothing after he left his job. He puttered around the house, cleaned out the garage, and read. He soon realized this was not fulfilling and his mood suffered. (Sorting out countless jars of nuts and bolts didn’t do the trick!)

He always wanted to try tennis and with his wife’s encouragement, he started lessons.

He also volunteers at the blood bank and regularly visits the children's hospital with his dog, lifting the spirits of young patients.

These changes made a huge impact on Fred’s outlook and level of fulfillment.

Depending on what one wants to do in retirement, we factor those costs into one’s financial plan. In Fred’s case, these aren’t high cost items but your post-retirement plan could look very different.

You are entering a new phase of life, and a successful and fulfilling retirement must have purpose.

Every year, the U.N., the Gallup organization, and a consortium of groups produce what’s called the World Happiness Report. (Yes, there is such a thing.)¹

For those over the age of 60, the U.S. ranked 10th out of 143 nations in happiness. Canada edged out the U.S., grabbing 8th place. In case you are wondering, Denmark topped the list.

Yet, according to Psychology Today, almost one-third of retirees feel depressed at times. For many, it's the absence of time in the office, and the loss of structure, identity, and purpose.

Making the best of retirement: 7 key points

1. Can you ease into retirement? If you are able, consider cutting back from full-time to part-time. It’s not only a way to stretch out your savings, but you are testing the waters of full-time retirement while keeping active professionally.

Consider this option a stepping stone to retirement.

2. Keep in contact with your work friends. Stay active socially. You’ve spent years with many of these folks, and they have become a part of your life. For some, they are extended family.

Participating in social events at your local community center, house of worship, or library can be a great way to stay connected. Do you enjoy museums, game nights, bowling, hiking, walking, book clubs, or volunteering? Your interests will direct your activities.

Volunteering ideas include:

The library
Your house of worship
Community arts center
Hospital or medical center
School district
Animal shelter
Food bank
Senior center
Outdoor parks and recreation

Isolation will take a toll on your health and mental attitude.

3. Set goals. “If you fail to plan, you plan to fail” feels like a worn-out cliché. In reality, much wisdom is packed into these nine words.

Setting goals allows you to gain some control over your future. It helps put you in charge as you chart a new course in life.

What are your priorities in retirement?
Would you like to downsize and relocate? Where might you want to live in retirement? What’s important in a new location?
Would you like to take up a new hobby such as learning a musical instrument, language, dancing, painting, cooking, or even skydiving?
What new activities would you like to tackle?
What do you like to do for fun?

Equally as important, set joint goals with your spouse or partner.

Be specific about your goals. Make them realistic and achievable, and measure your progress with deadlines. It goes without saying but be sure your goals align with your values.

4. Health and happiness—prioritize wellness and health. We cannot choose your goals for you, but we want to stress the importance of maintaining fitness. Consistent exercise can improve your overall health and well-being while also boosting your self-esteem.

But before starting any physical activity, please check with your physician. He or she can recommend a routine, help improve on what you’re already doing, and suggest ways to stay motivated.

5. Life long Learning. You were once a student in school, and you continued to learn and innovate at work. Maintain that posture in retirement! You exercise for physical health. Well, exercise your brain, too!

According to Harvard Medical School’s HealthBeat newsletter, studies have shown that you can help prevent cognitive decline and reduce the risk of dementia with some good health habits:

Stay physically active
Get enough sleep
Quit smoking
Maintain good social connections
Limit alcohol to one drink a day, and
Incorporate a plant based diet.

6. Gratitude. It’s easy to gravitate to the negative. Don’t!

What did you accomplish today? Did you exercise, meet with a friend, cook a new dish, find a new recipe, work in your garden, or plan a trip?

Studies suggest that writing down your positive feelings—just a few minutes each day—provides overall mental and physical benefits.

7. Structure. “When I retire, I’ll do whatever I want when I want” has a certain appeal. But lack of structure can get you into trouble. Like a plane without a flight plan, who knows where you might end up. You have 40 hours each week that are no longer occupied with familiar tasks. What do you do now?

You could consider a morning walk or a trip to your health club. What about a relaxing mid-morning coffee break? Can you volunteer and help others? What time do you like to shop or run errands?

Schedule your new hobbies. A schedule allows you to focus, gives you clarity and purpose, and forces you to engage.

It doesn’t have to be rigid. You are not on the clock. You are retired. You have time. But as many of us have often found, if we have too much time, time just seems to slip away.

Did that happen to you today? If so, start making changes tomorrow.

¹https://worldhappiness.report/

If you have questions, don't hesitate to contact me for assistance.

Check out this other blog article....

Maximizing Your Social Security

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All the best.

Rick Fingerman, CFP®, CDFA™, CCPS®

617-630-4978

Rick@PlanWithFPS.com

Financial Planning Solutions, LLC (FPS) provides this blog for informational and educational purposes only. Nothing in this blog should be considered investment, tax, medical, or legal advice. FPS only renders personalized advice to each client. Information herein includes opinions and source information that is believed to be reliable. However, such information may not be independently verified by FPS