Are You Ready to Retire?
The first thing that comes to mind for most people when they consider this question is do they have enough money. Of course, that is an important concern. You need to be confident you have enough resources to have an enjoyable and stress-free retirement.
When I ask clients, who are three to five years from retirement if they are ready the response is something like, “of course, you are our financial advisor and you have shown us that we have enough.” I then explain that being ready is more than about how much money you have. I ask them what they will do with their time and they do not have a clear answer. Often, they will mention travel, which is great but even if you travel for 8 or 10 weeks a year, that still leaves at least 42 weeks or 294 days. They spent 30 or 40 years preparing for retirement financially but have not given much thought to how they will spend their time.
Research has shown that there are several non-financial factors that can make up a happy retirement. It is important to have a sense of purpose for your time. You need to not only retire from something, but you should also retire to something.
It is important that pre-retirees spend a fair amount of time thinking and researching which types of activities will be attractive to them. If you find a charity with a mission and values with which you strongly agree, a commitment to volunteer could contribute to both the need for work with purpose and the desire for social activity. Part-time work could also contribute to these things. You might find an exercise group that could partially fulfill both the need for physical activity and social interaction.
A study of self-reported happiness revealed that involvement in social activities, exercise, working part-time or volunteering are far preferable than staying home and watching television. It also found that the degree of wealth did not have a significant impact on how individuals allocated their time.[1] Another study found that activities such as part-time work or volunteering enhanced both physical and mental health.[2] Many other studies have found consistently that social isolation increases the risks of premature mortality and results in poorer cognitive functioning.[3]
Of course, the maintenance of health is very important to a happy retirement. Consistent physical activity can make a significant contribution to health and longevity. You should consult your doctor before starting a new exercise routine. You could walk with a friend, join a walking club, or seek out one of the many exercise programs and classes especially designed for senior citizens and retirees.[4] The International Council on Active Aging has an online Facility Locator to help you find senior-friendly activities around the U.S.[5]
It might be necessary to relocate to make it easier to connect socially. Social interactions can be with children, grandchildren, neighbors, members of a social club or church. Many retirees will choose to move closer to their children who have relocated themselves to have more time with the children and grandchildren. Of course, there is no guarantee that the children will not move again at some point. Retirement communities can also provide many options for activities and socialization. The AARP Foundation sponsors a Connect2Affect program for older adults to connect with nearby communities and volunteer groups. The Institute of Aging has a toll-free hotline (800-971-0016) to provide ideas and support, as well.
Dennis J. Rogers, CPA, CFP® is a Registered Principal offering securities and advisory services through United Planners Financial Services. Member FINRA/SIPC. The information contained in this article is general in nature. You should seek professional tax and financial advice prior to implementing any of these ideas. FireSky Financial and United Planners Financial Services are not affiliated. He is a partner in a financial advisory practice in Phoenix that focuses on helping clients make smart decisions about their money based on their personal core values. He can be reached at drogers@FireSkyFinancial.com or 602-748-1900.
[1] Lawson, Derek and Klontz, Bradley, Journal of Financial Planning 30 (7); p 48-55
[2] Sunder, Aman, Swarn, Palmer, and Goetz, 2016, Academy of Economics and Finance Journal, (7)’ [ 99-105
[3] Cacioppo and Cacioppo, Evidenced Based Nursing, 17, (2), p 59-60
[4] Medical Guardian. “How to Find A Gym for Seniors”, https://www.medicalguardian.com/medical-alert-blog/fitness/how-to-find-a-gym-for-seniors
[5] https://www.icaa.cc/facilitylocator/facilitylocator.php