Enjoying a happy and fulfilling retirement requires mastering two essential fundamentals: money and time. Just as you should have a formal comprehensive financial plan in place, we believe you should also have a plan for how you will spend your time in retirement. We find that while many people plan for their financial future, far fewer people plan for what they will do in retirement to enjoy their financial freedom. Planning for a happy retirement is as important as planning for a secure retirement. This article begins a series of discussions on how to plan and live your best life in retirement. Here, we will focus on what we lose and what we gain when we retire.
What We Lose When We Retire
When we retire, we lose more than just our regular paycheck and our employee benefits. Non-financial factors we often lose include a sense of identity, structure, social engagement, and purpose and meaning. Here are some thoughts on each of these major life bedrocks that are often lost when we stop working:
- Identity. Our work role brings us a sense of identity. How we perceive ourselves is often informed largely by what we do for a living. For example, if you are introduced to someone, typically a question early in the conversation is “What do you do?” The common response is “I’m a teacher/CPA/fire fighter. What do you do?” How will you answer that question once you retire? Recently, I spoke at a local Rotary Club on the topic of Happiness in Retirement. A woman in the audience shared that she was a retired physician and that now, 10 years into retirement, she was still struggling with the loss of her career identity.
Research finds that people who have a keen sense of role identity are more likely to enjoy better mental health and relationships. So, what will be your new identity and role or roles once you retire? Perhaps it will be grandparent, volunteer, part-time consultant, or philanthropist. The key is to think about your past and present roles and to imagine and plan to build your future identity. - Structure. Built into our workdays is an abundance of structure--what time we get up in the morning, when our workday begins and ends, and how we spend our time on tasks, projects, and in meetings. It is likely that when we look at our work calendar on Monday morning, we find that we have a full schedule for the coming week. What happens when you retire and no longer have the structure that work provides you? What will you do today, this week, and this month? At a recent talk I gave, a woman noted that she found it challenging in early retirement to get out of bed in the morning and she shared that she was often late to engagements, something she never experienced when she was working.
- Social Engagement. For many, work provides us with a strong social connection as we often build relationships with co-workers over many years. Research finds that this is especially true for men. When we retire, the daily interaction with colleagues stops abruptly and sometimes completely. A friend of mine who was a police officer for three decades, shared that the first year of retirement was challenging for him. This was because of his loss of daily connection with friends from his police department. As we are by nature social animals, give thought to the strength of your current relationships with family and friends, surrounding yourself with people who are positive and supportive after you retire.
- Purpose and Meaning. Ideally, our job brings us a sense of purpose—a sense that our work is contributing to the greater good. Purposeful work positively impacts others and leads to a feeling that we are making our community and, in some way, the world better for our efforts. In his book, Drive. The Surprising Truth About What Motivates Us, Daniel Pink suggests that the factors that drive workplace satisfaction are autonomy, mastery, and purpose. I believe that our need for purpose doesn’t suddenly vanish when we retire. Whether you are still working or retired, give some thought to the role of purpose in your life. If you feel that purpose is missing, think about how best to fill that void. In a future article, we will talk about strategies to find purpose in a way that is congruent with your values and your capabilities. From my observation and experience, finding a rewarding volunteer role can often help provide a powerful sense of purpose and meaning in retirement.
What We Gain When We Retire
When we retire, the biggest thing we gain is autonomy--the freedom and control over what we do with our time. If we retire completely, it is likely that the first day of retirement will bring us more autonomy than we have ever experienced in our lives. However, autonomy can be challenging for some retirees, especially early in retirement. Gone is the structure that work brings us, as noted above. Some retirees have shared with me that retirement initially brought about a sense of boredom and aimlessness.
Perhaps your retirement will afford you the opportunity to travel more. Such experiences promise to bring you joy. Yet it is the daily routines and habits that will fill much of your calendar and strongly influence how well you will enjoy your retirement. You will want to think strategically about what you want your routines and habits to be.
The common narrative from the financial service profession is that if we accumulate enough money during our working lives, we will live happily ever after in retirement. The classic images portrayed in ads from financial institutions feature a happy couple walking or sitting on the beach. I think these messages fall short in at least two ways. First, for many retirees, a life of only leisure may not bring a deeply happy and meaningful retirement. Second, we believe that there is more to preparing for a successful retirement than just accumulating a sufficient nest egg.
As noted at the beginning of this article, successful retirement necessitates mastering how well we manage our money and how well we manage our time. Creating a comprehensive financial plan and putting it into action is fundamental to mastering your money. Further, we believe that how you maximize your autonomy and spend your time in retirement is optimally built on the foundation of a strategic plan. Thriving in retirement doesn’t happen by chance. Whether you are retired or approaching retirement, planning your future can help ensure that you continue to enjoy a happy and fulfilling life. Know too that while planning your retirement life, you have the flexibility of changing direction as you go. Your retirement vision need not be cast in stone.
We look forward to bringing you more of our perspective on the topic of Happiness in Retirement. We welcome hearing from you with any questions, comments, and experiences you would like to share. I also enjoy having one-on-one conversations on the non-money aspects of retirement. Feel free to contact me at matt@westhillfa.com.