The great retirement paradox is that there is so much time, and yet so very little of it. Yes, we are living longer, healthier lives, yet at some point, it will come to an end. So, what do we do with this new chapter of life that may last another twenty or thirty years? While that thirty-year horizon is full of possibilities, it can also be daunting and full of questions: Did I save enough? How will I spend my time? Where will I live? What kind of legacy will I leave?
Answering these questions will help you begin to identify your ideal retirement lifestyle and shed light on what steps you need to take to build it.
Part 1: Identifying Your Ideal Retirement Lifestyle
To begin, I’ll take you through an exercise designed to help you identify and pursue your ideal retirement.
Step 1: Assessing Your Retirement Emotions
I often work with clients who struggle with the discomfort of being newly retired. The struggle is often the result of simply not spending enough time in advance considering what life might look like upon leaving a career. There are challenges with identity, relationships, finding new ways to fill time, and maintaining a social life.
Know upfront that you are likely to experience a range of emotions – and they won’t all be positive. There will be excitement at closing one chapter of life and beginning another, mixed with sadness for these same reasons. You’re also likely to experience fear of the unknown, as well as the weight of responsibility for filling so much of your own time. However, you can tip the scales toward feelings like excitement, empowerment, and accomplishment simply by reflecting on what you want out of your retirement lifestyle before you leave the working world behind.
SEE ALSO: How to Handle Transitional Stress
Step 2: Developing Your Retirement Identity
So, you’ve come to terms with the fact that retirement will be an emotional and challenging time in some ways. Now it’s time to focus on the fact that you likely won’t feel quite like yourself anymore. Most people develop much of their personal identity based on the work they do, meaning you need to ask your retirement self the question: Who am I now?
When you disconnect from your job and all it means to your identity, you can cope by intentionally giving yourself an “identity makeover” of sorts. First, begin by considering all the things beyond work (and raising children, if you’re a parent) that bring you a sense of purpose and independence. This could be something like playing a more active role as a grandparent or a spouse, becoming a mentor, or getting involved in your community or local government. Maybe your answer is more to do with traveling or even beginning an encore career. There is no right or wrong answer – the point is to know your answers. Taking the time to consider your new retirement identity will help you enjoy your newfound time and freedom.
Step 3: Remember That You Are Not Your Hobbies
I know what you may be thinking: “Oh, I’ll be fine with all the time I’ll have in retirement. I can turn off work and focus on my golf game and I’ll have plenty to do.”
This is a common mindset, but a flawed one. I don’t know anyone who golfs seven days a week for 12 hours a day and, whatever your hobbies may be, I imagine the same holds true. If you’re relying on a hobby or two to fill your time in retirement, you need to envision the full scope of your days. Use a calendar, either hard copy or digital, and map out your days. What will your mornings look like? What about your afternoons? What kind of evening routines will you develop? Looking at your schedule in this way will show you exactly where your hobbies fit and – more importantly – where you will still have significant segments of time to fill.
Step 4: Consider New Relationship Challenges
Who will you be living with in retirement? For many people, this phase of life means spending considerably more time with a spouse. This can lead to marital strain for a number of reasons. The most common factors that contribute to spousal relationship challenges in retirement are the timing of the retirement, how closely your identity is intertwined with work, both members’ roles within the relationship, and competing retirement goals.
Consider this: 38 percent of couples who are not yet retired disagree about the lifestyle they expect to live in retirement, and one in three couples disagree about their ideal vision for retirement. If you’d like to avoid becoming one of these statistics, the answer is communication. Conversations about retirement are the most powerful tool to help you and your spouse visualize a satisfying and fulfilling retirement lifestyle. After all, it’s much easier to establish a plan of action when both spouses have shared a clear picture of their retirement vision. This gives you time to set ground rules, make plans, and get proactive. Schedule a conversation today and focus on the two areas most successful retired couples are clear about: (1) when they will retire, and (2) how they will spend time together and apart. Both discussion points will serve to ease possible tensions that may arise when one or both of you prepares to retire.
Part 2: Building Your Ideal Retirement Lifestyle
The self-assessment above should help you lay the groundwork for identifying your ideal retirement lifestyle; now it’s time to build out your plans. Hopefully, you’re entering this phase of planning with a sense of purpose, an understanding of your financial resources, and ideas for filling your time. Now, it’s time to get realistic about your plans.
How will you stay active?
Will you work part-time, volunteer, learn a new skill? Make sure you have plans for keeping your body active, your mind engaged, and your social calendar nicely filled. Your plan should allow you to enjoy the relaxation that comes with retirement without becoming sedentary. Striking this balance is critical to your emotional and physical well-being.
What are your housing plans?
Homeownership is one of the largest expenses in retirement for many people and, if it’s not planned for, it can impact your retirement lifestyle. Will you keep your home, downsize, move closer to your children and grandchildren? For many people, a transitional housing option like a condo may be a smart move before committing to a major change in housing.
Are your finances in order?
Many people worry about running out of money in retirement. Once you know what you want your retirement lifestyle to look like, you can make practical financial plans to support your vision. Start by setting goals – not arbitrary ones, but goals that take into account the cost of living the lifestyle you want. This includes your own cost of living, but don’t forget to consider any financial support you intend to provide to children or grandchildren, as well as anything you’d like to leave in your estate plan. Next, create a spending plan so you can control your expenses. Think about things like reducing debt and replacing your current income stream.
You also need to devise a savings plan, as well as a plan for your Social Security options. Part of your savings strategy should address planning for unknown expenditures that will creep up in retirement, meaning you’ll need some flexibility in your budget. Since your assets are finite and some of your needs are unknown, don’t neglect tax planning. You’ll need a tax-efficient plan for utilizing your assets in retirement in order to make the most of your nest egg.
Finally, ask yourself what you want your legacy to be. Do you want to leave money to your children, grandchildren, and favorite charities when you pass? How you spend and save today will impact those future goals, so build your strategy now.
SEE ALSO: The A.R.T. of Retirement
Where to Go from Here
The retirement lifestyle assessment and planning strategies above provide a proactive guide for identifying and building your ideal retirement lifestyle, but they may also open up a lot of questions for you and your spouse. If you’d like assistance with your retirement planning or your overall financial plan, please reach out today. At Flourish Wealth Management, we pride ourselves on helping our clients flourish financially.
Finally, if you enjoyed the guidance in this article, please consider reading my book. In Flourish Financially: Values, Transitions, and Big Conversations, I dedicate a full chapter to identifying and building your ideal retirement lifestyle.