Retirement Advice From Active Retirees
By [http://ezinearticles.com/?expert=Keith_Tufte]Keith Tufte
Most working people imagine retirement with wonderful visions of being on permanent vacation, sleeping late every day, and traveling. That is not the reality for most retired people. There are 10,000 baby boomers per day turning age 65 in the United States. Most retirement advice is focused on the financial side of retirement. It is also helpful to think about the “softer” issues related to achieving a happy retirement.
The following advice on retirement is focused on advice about living happily in retirement, not just paying for it. It seems to us that people who enjoy their retired years are as focused on achieving their life goals, as they are their financial goals. The advice here comes from actual experienced retirees, and from our observations about our clients who are retired.
The emotional aspect of leaving the workforce can be jarring, and many new retirees have a tough time feeling productive with their new-found free time. A comprehensive retirement plan addresses money, health, life goals, family, and social issues. How can you still feel relevant in retirement? For many people, much of their own personal identity is tied to “what you do” for a living while working. That changes in retirement. For many people retirement can last 25-30 years. According to the Society of Actuaries, there is a 63% chance that at least one member of a 65-year old couple will live to age 90 or more. What is your plan for those 25 years? What will you do with all that extra time? One of our clients mentioned that in retirement your 60’s are the “Go-Go” years, your 70’s are the “Slow-Go” years, and your 80’s are the “No-Go” years in terms of how many activities and how much travel you are able to do. Plan your retirement accordingly.
Below is the retirement advice we got from current retirees.
Retire TO something you are passionate about, rather than retiring FROM work. People who retire to something they are excited about seem to be the happiest in retirement, and are able to make the easiest transition into retirement. Those who retire from work without a game plan, a passion, hobbies, etc. often have a tough time mentally and emotionally making the transition. What are you passionate about outside of work?
Continue to work and expand your interests for as long as possible. By continuing to stay engaged in important regularly scheduled activities you retain your sense of purpose. You have a reason to get up in the morning. Working part-time, family support and/or volunteering can continue to provide purpose and meaning for your life. Retirement should not be driven by age but by a desire to do something else with the rest of your life. The people we see that seem to be the happiest are very busy in retirement doing many different things, including social interactions on a regular basis. They say “I don’t know how we had enough time to work before we retired!” Your work week provided a great deal of structure to your days. It is a good idea to create structure in your days as a retiree as well. One retiree recommends having a purpose in life beyond just having fun. Get out there and get involved!
Take care of your health. Keep moving and stay fit. Manage your health in a daily and disciplined manner as much as you manage your finances.
Have a plan for healthcare costs. Healthcare costs increase significantly as people get older. A typical 65 year-old couple retiring now needs roughly $230,000 to cover medical expenses in retirement, not including long-term care costs, according to Fidelity Investments. Those numbers could increase as Medicare is poorly funded now, possibly resulting in reduced benefits or increased “means testing” for benefits in the future. What is your plan for future healthcare costs and possible long-term care costs?
Establish a strong network of friends and family. Develop new social connections. “Invest” in your friends and family. Having strong social connections is a critical element of a happy and healthy retirement for most people. Don’t let financial or tax considerations dominate your decisions or get in the way of keeping your social/family network strong. When you retire you will not miss the work as much as you will miss the people and the relationships.
Discuss retirement with your spouse. Is your spouse really ready to have you around the house full-time? Is your spouse’s vision of retirement the same as yours? For many couples there are things each of you will want to do separately, and some things you will want to do together. Retirement by one or both spouses can significantly impact the relationship you have with each other.
Create a budget and stick to it. It is smart to practice living on that budget before you retire. Many people have difficulty mentally adjusting to no longer having a regular paycheck coming in to cover their monthly living expenses. They think every dollar they spend is one dollar closer to running out of money, and they live their lives frugally and often well below their means. It’s OK to spend the money you have worked so hard to create. It’s time to enjoy the fruits of your labor. We help our clients come up with a strong financial plan, a retirement budget, and we can create a “retirement paycheck” that gets transferred to their checking account every month.
Pay off your mortgage and other personal debts before you retire. It is easier to enjoy a stress-free retirement without a mortgage hanging over your head. If you are planning to retire and you still have a mortgage, it may be a red flag that you really can’t afford to retire yet.
Decide how much of your wealth you will share with your children, and when. How much is too much. These are difficult and personal decisions that differ with each family. Many retirees enjoy sharing some of their wealth with their children and grandchildren while they are still alive. Don’t bail out your kids repeatedly if it puts your own financial security at risk.
Perhaps the best retirement age is never? Some people may need to work forever for financial reasons. Others may be so passionate about their work that it doesn’t seem like “work” to them, and they may decide to stay working as long as they possibly can. These work lovers may be type-A personalities who can’t imagine doing anything else or enjoying anything else as much as working. Many people are now working into their 70’s because they love what they do. There is absolutely nothing wrong with that.
We think a complete and comprehensive plan for a happy retirement goes beyond financial security. It requires a plan and concerted effort to remain active, healthy, busy, and socially involved to live happier and better in retirement, not just longer.
Keith Tufte, CFA
Adam Smith Advisors, LLC
Cherry Tree Companies http://www.cherrytree.com
Retirement Advice From Active Retirees