There are many milestones that signal you’re close to retirement. It could be that you’ve put your kids through college and its painful tuition bills. You’re attending an increasing number of work parties celebrating many years of loyal service. You or a loved one may have suffered a health scare or setback reminding you that your days are increasingly precious.
Prospective retires and financial advisors often place greatest emphasis on what I call the spreadsheets. Where is the money going to come from? It may be Social Security or a defined benefit pension such as Colorado PERA. Sources such as IRAs, Roth IRAs, taxable investment accounts, retirement plans, and rental properties come into play. Evaluating retirement becomes life’s most important math problem, made up of expected investment returns, risk factors, and income tax.
Analytical tools do have their place. But we often ignore other important retirement success factors. The resources we have marshalled are there to support healthy, enriching, and enjoyable lives when we no longer have work incomes. There are plenty of retirees with ample financial wherewithal who don’t find retirement wholly satisfying. Learn from this and consider these factors to go beyond the spreadsheets.
Know How You’ll Fill Your Days. One helpful exercise is to make a sample weekly calendar of your current working life and another for the next stage. Put morning, afternoon, and evening for each day. If you’re like most working people, of those 21 weekly slots you already have ten occupied by your job. If you’re planning on leaving your career altogether, then those ten spaces will be a vacuum that should be filled.
We in Boulder County are well known for our hobbies, particularly in the outdoors. These are wonderful to have once you’re no longer working five days a week. But if you’re like most retirees, you won’t be able to bike, garden, ski, golf, paint, run, climb, or hike enough to replace all of the time you’re working. It’s also true that for most of us tracking our portfolio day by day and reading email isn’t enough.
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 or customers) in part to contribute more in value than you’re being paid. Hopefully your work purpose goes beyond this into the realm that you enjoy how you spend your days and harbor a belief you’re improving the world around you. Once you retire part of life’s purpose goes away for most, which can pose a threat to your health.
A recent meta-analysis (http://circ.ahajournals.org/content/131/Suppl_1/A52) by researchers at Mt Sinai St. Luke’s-Roosevelt Hospital incorporated ten separate studies. Together they tracked people with an average age of 67 for about 7 years. It showed that having a high sense of life purpose or usefulness to others resulted in a significant reduction in mortality and cardiovascular conditions. I suspect that those with a sense of purpose not only live longer and healthier lives, but also happier ones.
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. They may be relatively weak ties, for people with whom we share a quick hello or Broncos and Buffs banter. Both of these types of connections are important to happiness, and will likely ebb once you ramp down your work. Start building social networks outside the workplace now. For most of us, our spouse is not enough both in terms of the variety and richness of interaction as well as having that support if we survive our spouse.
Guard Your Health. It doesn’t matter how many millions you have amassed if you don’t have your health. Of course there are certain genetic factors that cannot be helped. Having positive exercise, eating, and sleep habits that begin while you work can propel you to an enjoyable retirement.
Notice that at least three of these factors could be at least partially addressed by continuing to work, at least part-time. For many retirement (and its association with having your feet up on a chair) is not a desired outcome. Working in a career you love at your desired intensity could help benefit you financially and mentally for many enjoyable years to come even if you are “retired.”