Making Sense of Retirement Planning - 3
Today we're going go review more items you should think about before retirement. We touched on some of this in our first installment on this theme, but now we'll drill down a bit more.
Unless you've got no assets - or as we used to say, don't have two nickels to rub together - you face a lot of fairly important, and somewhat complicated financial decisions to properly plan for retirement. We'll get to those, but first let's review some of the no-less-important non-financial decisions you'll be making.
First of all, you'll want to have something to do, i.e., you want to replace work with other roles and activities. If you have a social network and healthy lifestyle, you've got a good base to start. If not, and you're not yet retired, these are areas you can work on before you pull the plug. I recently met a gentlemen who, when asked if he was retired, answered: "I'm absolutely, totally retired...but that doesn't mean I'm not busy doing other things." Bravo, sir! You'll likely do well in your retirement.
Speaking of "when you retire," do you have a date in mind? You should. Of course, you can always change it as circumstances change, but just as any serious goal should include some sort of date by which you wish to accomplish it, so should retirement.
While setting a date will give your retirement planning some structure, at least regarding time line, you'll need to think about what work means to you. For some of us, work is nothing more than a job that brings in the bucks you need and want. On the other hand, some of us so identify themselves with our work, we'd have trouble picturing ourselves without having that work. For example lawyers I've worked with tend to think of themselves exclusively as "attorneys" and so tend to never want to retire.
But even if your sense of self isn't so locked into your profession, it could be that your actual everyday activities may be so tied in with your work, you'll have a devil of a time in retirement. Some high-powered executives I've known can't manage simple things post-retirement: making restaurant reservations, booking flights for travel, paying bills, and so on. Even setting up a daily schedule can be challenging when you've had an assistant (or assistants) doing these things for you for years.
And you don't have to be a "big shot" for this transition to present problems. If you've been going to the same workplace for many years, breaking that pattern may not be easy. Then again, it might be. One individual who worked in the same industry for 40 years recently retired and simply became absorbed in family life full-time: spouse, children, grand-children. No problem. The point here is you should put some thought into this so you can be mentally, psychologically, and emotionally prepared.
Where you're going to live may be an important decision for some. If you're thinking of moving to new location, don't take the decision lightly. For example, moving from an expensive part of the country like the New York metro area to a more affordable area - let's say South Carolina - may sound attractive from a financial perspective. But if most of your family lives in and around New York, will that work for you? For some, it will; others won't like the distance, despite the availability of relatively affordable air travel. And maybe the audio and video contact you easily get with phones and Skype or FaceTime can't beat grabbing lunch or dinner, taking the grand kids to the park, or just spending Sunday afternoon watching a ball game together. You've got to think this through.
Even the decision to downsize a home may not be easy to execute when the time comes. Unless you're one of that rare breed that hasn't filled up your current space to the max - maybe even beyond the max - paring down your stuff so it fits into your new place may be a rather lengthy, even daunting project. And there's always that emotional attachment some of us have to a place we may have lived in for decades. Remember too that moving is considered one of the most difficult, emotionally laden events in life. So don't take this lightly. Give yourself time to not only sort through your stuff, but to say good-bye to it as well. On the other hand, some of us may look forward to a change. We relish the thought of a smaller, simpler life. We're all different.
One additional and important tidbit to mull over related to your decision where to live: it may not be a once-and-for-all decision. One pattern we find in retirement goes like this:
When we circle back to retirement planning again, we'll take a deeper dive into decisions involving pensions, Social Security, best way to address health care expenses, and more.
Unless you've got no assets - or as we used to say, don't have two nickels to rub together - you face a lot of fairly important, and somewhat complicated financial decisions to properly plan for retirement. We'll get to those, but first let's review some of the no-less-important non-financial decisions you'll be making.
First of all, you'll want to have something to do, i.e., you want to replace work with other roles and activities. If you have a social network and healthy lifestyle, you've got a good base to start. If not, and you're not yet retired, these are areas you can work on before you pull the plug. I recently met a gentlemen who, when asked if he was retired, answered: "I'm absolutely, totally retired...but that doesn't mean I'm not busy doing other things." Bravo, sir! You'll likely do well in your retirement.
Speaking of "when you retire," do you have a date in mind? You should. Of course, you can always change it as circumstances change, but just as any serious goal should include some sort of date by which you wish to accomplish it, so should retirement.
While setting a date will give your retirement planning some structure, at least regarding time line, you'll need to think about what work means to you. For some of us, work is nothing more than a job that brings in the bucks you need and want. On the other hand, some of us so identify themselves with our work, we'd have trouble picturing ourselves without having that work. For example lawyers I've worked with tend to think of themselves exclusively as "attorneys" and so tend to never want to retire.
But even if your sense of self isn't so locked into your profession, it could be that your actual everyday activities may be so tied in with your work, you'll have a devil of a time in retirement. Some high-powered executives I've known can't manage simple things post-retirement: making restaurant reservations, booking flights for travel, paying bills, and so on. Even setting up a daily schedule can be challenging when you've had an assistant (or assistants) doing these things for you for years.
And you don't have to be a "big shot" for this transition to present problems. If you've been going to the same workplace for many years, breaking that pattern may not be easy. Then again, it might be. One individual who worked in the same industry for 40 years recently retired and simply became absorbed in family life full-time: spouse, children, grand-children. No problem. The point here is you should put some thought into this so you can be mentally, psychologically, and emotionally prepared.
Where you're going to live may be an important decision for some. If you're thinking of moving to new location, don't take the decision lightly. For example, moving from an expensive part of the country like the New York metro area to a more affordable area - let's say South Carolina - may sound attractive from a financial perspective. But if most of your family lives in and around New York, will that work for you? For some, it will; others won't like the distance, despite the availability of relatively affordable air travel. And maybe the audio and video contact you easily get with phones and Skype or FaceTime can't beat grabbing lunch or dinner, taking the grand kids to the park, or just spending Sunday afternoon watching a ball game together. You've got to think this through.
Even the decision to downsize a home may not be easy to execute when the time comes. Unless you're one of that rare breed that hasn't filled up your current space to the max - maybe even beyond the max - paring down your stuff so it fits into your new place may be a rather lengthy, even daunting project. And there's always that emotional attachment some of us have to a place we may have lived in for decades. Remember too that moving is considered one of the most difficult, emotionally laden events in life. So don't take this lightly. Give yourself time to not only sort through your stuff, but to say good-bye to it as well. On the other hand, some of us may look forward to a change. We relish the thought of a smaller, simpler life. We're all different.
One additional and important tidbit to mull over related to your decision where to live: it may not be a once-and-for-all decision. One pattern we find in retirement goes like this:
- Move to a hospitable climate early in retirement.
- Move closer to children and grandchildren after some years.
- Move yet again to address care needs.
When we circle back to retirement planning again, we'll take a deeper dive into decisions involving pensions, Social Security, best way to address health care expenses, and more.
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