Not all retirees succeed at realizing the life they want. Fate aside, it isn't just a matter of your investment decisions that make the difference. There are certain dos and don'ts – some less obvious than others – that seem to boost retirement happiness and comfort.
Make it your mission to retire financially literate.
Some retirees don't know just how much they don't know. They say goodbye to their careers possessing inadequate financial knowledge yet feel they can prepare for retirement without professional assistance. They confuse creating a retirement income strategy with the entirety of preparing for retirement, and they minimize the importance of longevity risk, risks to their estate, and potential health care expenses. The more knowledge you have, the better your retirement readiness.
Is debt a factor?
Will you be able to retire debt-free – or close to debt-free? Even if your retirement savings are substantial, you may want to consider reviewing your overall debt situation. Sometimes it makes sense to dip into your savings to pay off your debt before retirement. Sometimes it does not. Your trusted financial advisor can help you lay out different scenarios and will help you decide which is better in your specific financial situation.
Retire with meaning.
While you may not realize it, there is a difference between retiring and quitting. Some people can't wait to quit their job at the age of 62 or 65. If only they could make their escape from work and sit back and relax and do nothing for a few years – wouldn't that be a nice reward? Relaxation sometimes leads to inertia, however – and inertia can lead to restlessness, even depression. Your goal is to retire into a dream, not away from a problem.
The bottom line? Retirees who know what it is that they want to do – and go out and make it happen – are positively contributing to their mental health and possibly their physical health as well. If they do something that is not only essential to them but also significant to others, their community can benefit as well.
Smoking, drinking, overeating, an absence of physical activity – all these things could take a toll on your capacity to live your life fully and can zap enjoyment from your retirement. It is never too late to change habits that lead to poor health.
Retire where you feel at home.
This could be where you currently live; it could be a nearby place where you find the scenery and people uplifting; it could be wherever your family is. Some people find themselves becoming lonely or bored in retirement. If this is the case, look for ways to connect with people who share your experiences, interests, and passions, those who encourage you and make you feel welcome. This valuable social interaction is one of the great, intangible benefits of retirement.
A successful retirement is not just measured in dollars and cents.
Even those who retire with a small fortune can encounter boredom or depression and the worry of drawing down their retirement savings too quickly. How can new retirees best calm these worries?
Two factors may help: a gradual transition into retirement and some guidance from a trusted financial professional.
Breaking abruptly from the workplace may be unsettling.
As an example, let’s imagine a well-paid finance manager at an automobile dealership whose personal identity is closely intertwined with his job. His closest friends are all coworkers at the dealership. When he retires it feels like all of a sudden his friends and sense of purpose are gone. He finds that he has nothing to look forward to when he gets up in the morning and no compelling reason to leave the house. Guess what? This probably won’t surprise you, but he hates being retired.
Alternatively, if he begins preparing for his retirement years in advance of his farewell party by exploring an encore career, engaging in varieties of self-employment, or volunteering, he can retire with something promising ahead. If he broadens the scope of his social life to include seeing friends and family regularly and interacting with both older and younger people in different settings, his retirement may also become more enjoyable for him.
The interests and needs of a retiree will change with age or as they disengage from the working world and all the things that they’re accustomed to. Retired households may need to adjust their lifestyles in response to this evolution.
Practically all retirees experience some financial anxiety.
This is unavoidable and relates to the fact that you’re no longer earning a conventional paycheck. You will see it in couples who have $60,000 saved for retirement; you’ll see it in couples who have $6 million saved for retirement. Their long-held retirement strategies and beliefs are about to be tested, in real-time. All that careful preparation is ready to come to fruition, but there are always going to be unknowns.
Some retirees are afraid to spend their money. They fear spending too much too soon and running out of money. With help from a trusted financial professional, they can create a strategy. This usually will include a budget, which is a scary word, but embrace it. Knowing how much you have and how much you can spend keeps you on track and your mind at ease.
Retirement challenges people in two ways.
The obvious challenge is financial; the less obvious challenge is mental. Both tests may be met with sufficient foresight and dedication.