Most folks who are considering retirement are confident that their nest eggs will support them throughout their golden years. But while feeling financially secure is an important part of retirement, in my experience, it's usually not reason enough to stop working. That's because a successful retirement isn't about hitting some asset goal -- it's about using those assets to live your best possible life. And as we continue to deal with all the disruptions to our lives and work that the pandemic caused, it's more important than ever that seniors make sure they're retiring for the right reasons.
If you think this might be the year that you retire, ask yourself these three questions to see if you're both financially and mentally prepared.
1. Do you want to stop working? Or do you just need a change?
After two years of facemasks, lockdowns, nose swabs, and endless worry, we're all feeling burned out. But while much of the conversation around the pandemic and work has focused on younger employees and the Great Resignation, being the boss hasn't been any easier. Studies are showing that burnout is becoming a problem for executives and managers as well, many of whom are probably baby boomers thinking about accelerating their retirement timelines.
Is burnout a good reason for retirement? That's a tough question that requires some serious personal reflection. I'm certainly not downplaying the tremendous stress that COVID has caused folks in all lines of work -- especially medical professionals. But if you're thinking about retiring just because you need a break, you may be disappointed. New retirees often face a whole new set of stresses, from adjusting to life on a fixed income to feelings of aimlessness and depression. Moreover, depending on where you live and how the next couple months play out, the pandemic could be as disruptive to your retirement plans as it's been to your workplace.
One way I often frame this decision for folks is: Don't retire FROM your job, retire TO something you're excited about. If you don't feel that excitement, you might be better off cashing in some vacation days, taking a sabbatical, cutting back your hours, or just unplugging more effectively when you're off the clock. You might even consider joining the Great Resignation and exploring alternate jobs.
2. How will you find purpose once you stop working?
This idea of retiring TO something isn't just about playing lots of golf or chugging through a Great Books list. The "endless weekend" version of retirement might keep you busy ... for a while. What it won't necessarily do is make you feel like you have a reason to get out of bed in the morning the way that your old job used to.
Now, there are some folks who do find that sense of meaning and purpose in activities they love. If you're excited to start working with your country club pro three times a week so that you can shave strokes off your handicap and tackle the country's best golf courses, more power to you! Creative types who spend their off hours whittling away in their woodshops or chipping away at their own novels might go all-in on those hobbies and become real craftsmen, artists, or even entrepreneurs.
Folks who don't have that level of interest in a hobby might grow bored with their "endless weekend" very quickly.
If you're having trouble picturing your life without work, take a moment to think about what you really do, and what makes that work fulfilling. Take your company and your job title out of the equation and really focus on your day-to-day tasks and responsibilities. Then, think about how you can continue to exercise those skills as a retiree. Find a volunteer position or a part-time job. Consult. Teach. Mentor. Turn a long-simmering business idea into your own company.
With this kind of purposeful retirement schedule in place, you'll still have your favorite weekend activities to look forward to. Hopefully, you'll also make some time to try new things and cross off some bucket list goals.
3. How strong is your emotional network?
Many seniors are unprepared for just how lonely retirement can feel. You might not appreciate how much time you spend with your colleagues and office friends until you're not seeing them every day anymore. Single seniors might not have any family nearby to spend time with. Even married couples rarely share all the same interests, and in retirement, might still have different schedules that leave one person on their own for a big part of the week.
On the other hand, retirement can be an ideal time to meet new people, or to invest new time and energy in existing relationships. Instead of catching one of your grandkids' baseball games every year, you can be a regular in the stands. You can organize meals and outings with other retired friends who might be experiencing the same transition difficulties. You and your spouse can revisit the activities you used to enjoy when you were younger and had fewer responsibilities.
And, occasionally, you can take time for yourself to reflect on who you are as you start this new chapter of your life and how you want to spend the coming decades.
Having a financial plan in place can make navigating these emotional and mental issues a bit less daunting. Get in touch with my team at Keen Wealth and let’s discuss what you’re thinking and feeling as retirement approaches and how our planning process can help.
Bill Keen is a CHARTERED RETIREMENT PLANNING COUNSELOR℠ and independent financial advisor with more than 25 years of industry experience. As the founder and CEO of Keen Wealth Advisors, a registered investment advisory firm, he specializes in providing personalized retirement planning designed to help people thrive before and during their retirement years. With a passion for educating others, Bill regularly blogs about retirement planning, hosts the podcast Keen on Retirement, and has contributed to U.S. News and World Report, Reuters, Wall Street Journal’s Market Watch, Yahoo Finance, and other publications. Based in Overland Park, Kansas, Bill and his team work with clients throughout the greater Kansas City area and across the nation. To learn more, connect with him on LinkedIn or visit www.keenwealthadvisors.com.
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