Key Takeaways
Retirement is More Than a Number: It’s not just about hitting a savings goal or a specific age; it’s about envisioning what your life will look like in retirement.
Purpose and Meaning Are Vital: Consider how you’ll find purpose and social connections beyond your career. This can greatly impact your happiness in retirement.
Flexibility and Options: Financial freedom offers the ability to explore new passions, part-time work, or even a different career that aligns with your personal goals.
“The trouble with retirement is that you never get a day off.” – Abe Lemons
Remember the TV commercials from ING [video] in which everyone walks around town with their retirement savings number trailing behind them? Those “What’s Your Number?” ads were clever, but a little misleading. Financial freedom is something that everyone dreams of. But reaching a certain age or savings milestone in your retirement account doesn’t mean you should necessarily stop working.
When we first start working with clients, one of the first things we ask them is: “What does retirement look like to you?” They usually respond with a target age, say 60 or 65, at which they think they’re supposed to be retired because they’ll be eligible for Social Security. However, people tend to get so hyper focused on their retirement date that they overlook planning how they’ll spend all their newfound free time when they finally reach the finish line. Without thoughtful planning, the so-called golden years can turn into the boredom years or the stir-crazy years. That’s not the kind of freedom most people envision, is it?
Finding Purpose After Full-Time Work
Having worked with so many highly accomplished individuals in their 50s and 60s, I’ve found it’s all about finding meaning and purpose in life when you are no longer tied to a paycheck. After careful consideration, clients often discover that work still brings them great satisfaction, mental challenge and a feeling of connectedness to colleagues, clients and customers they love. For others, they’re so burned out from the demands of their career or running a business, that they can’t wait to hit the exit ramp.
Retirement is a very personal decision, and no two people have the same criteria, regardless of their age or health. We often spend more time with clients planning their retirement scenarios than constructing their portfolios. Thanks to advances in healthcare and technology, work can still play a role in your “retired” life for years or decades to come. You can stay in your chosen industry or profession as a part-time consultant or freelance specialist. You can help mentor or train younger members of your profession.
Or you may just want to explore a new field entirely. We have clients who “retired” from their executive positions at pharmaceutical companies who are now happily working at places like Home Depot or the local bakery. It’s not about the money. They like the predictable hours and flexibility of their retail jobs. The find satisfaction in helping someone find a critical piece of hardware for a project or baking a cake for someone’s special occasion. It’s about contributing to society, not just to yourself.
Freedom To Embrace Risk
One thing that surprises many people when we first start working with them is that financial freedom gives them the ability to take more risks in life (not fewer), such as pursuing a passion project or starting a new business. If you wake up in the morning with a purpose and an activity to engage in, it provides you with a purpose. For many people, it gives them an identity. Losing that identity can be extremely hard for someone who’s been a successful executive, professor or business owner most of their adult life.
“A retired husband is often a wife's full-time job.” – Ella Harris
The workplace also offers valuable social connections. Some retirees just sit home and drive their spouses a bit crazy as they get lonelier and more frustrated by the day. By contrast, a workplace at any level on the org chart provides a place to have social interactions and mental growth. We find that clients who work longer tend to stay sharper longer because they’re actively solving problems and potentially learning new skills. Without that mental stimulation, people become complacent, avoid new experiences, and can end up being real homebodies for whom the news becomes their social interaction – and trigger for depression.
I have a recently-retired client in South Carolina who’s ardently pursuing his passion for photography – something he never had time for as a biotech executive. I have another client – an endocrinologist-- who left her industry after a long and successful career and moved to Massachusetts to pursue her passion for painting. She went back to school earning a Master of Arts and now spends a good portion of her retirement years teaching others and enjoying her home studio.
“Half our life is spent trying to find something to do with the time we have rushed through life trying to save.” – Will Rogers
When to Consider Downsizing Work Instead of Retiring
Some younger clients who are burned out from their high paying jobs, have just about enough money to retire, but they’re not close to being able to start taking Social Security or live off their portfolio yet. In those cases, we advise them to get a lower-paying, less stressful job for a few years that covers their living expenses even if they’re not able to continue funding their retirement account. This approach helps them transition out of their high-stress roles while maintaining financial stability.
Healthcare If Retiring Before 65
A common concern among clients is healthcare. Many feel they need to keep working simply for coverage until they become eligible for Medicare at 65. Don’t let healthcare concerns force you to keep working if your job is taking a mental health toll on you. There are a few options that can be considered to maintain coverage during those gap years. One is simply to pay for the coverage as long as it does not impact your long-term retirement plan. The other is to explore subsidy options through the healthcare exchange. These are all considerations can that be explored with your financial planner.
Conclusion Again, there are a myriad of ways to approach retirement and there’s no one-size fits all solution. Don’t let your age or societal convention stand in the way. Financial freedom is about finding balance in life. If you or someone close to you has concerns about the strength of your portfolio or your retirement readiness, reach out any time. I’m happy to assist.
DAN SATZ MS, CFP® is a Partner at Novi Wealth
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