Retirement Planning

Retirement Planning

It is Not Just About Money

Retirement planning should start early. It is ideal to begin planning for retirement in your 20s and 30s, instead of waiting until your 50s and 60s, at which point you are playing catch-up and running out of time to save enough money for comfortable golden years.   But planning for retirement is not just about money.  Yes, money is important, but so is knowing what kind of retirement you would like to have.  Is it going to be one full of recreation or of volunteering?  Or is it going to be one with part-time work and travel?

Money, of course, will determine which of this, but waiting until you are in retirement to decide what kind of retirement you would like to have does not leave a lot of room to make changes if needed. And if you want to actually achieve the kind of retirement you want to have, you need to visualize it and plan for it.

Retirement these days can last 40 years. If you take early retirement at age 55 and then lived to age 95, you are spending nearly half your life in retirement. This is not as far-fetched as it sounds since people are living longer than ever before. Insurance actuaries now calculate life expectancy into the 90s. If you are currently in your 30s or 40s, you could easily live to age 100.

That is a lot of time to fill if you are not working. Of course, with economics as they are today, many people will need to work in retirement, and the concept of retirement itself may change.  Still, most people are not going to work until the day they die, so the kind of retirement you want needs to be planned out.

Do you want to start your own business?  Do you want to start a nonprofit organization and help others?  Do you want to volunteer, either at the local food bank or in a remote Latin American village?  There are numerous volunteer organizations that recruit retirees to volunteer around the world.   The Peace Corps has a program for people age 50 or better and needs volunteers to help in Third World countries.  Do you want to golf all day?  Or climb all of the 14,000 foot peaks in the world?  Or maybe just read every book in the library?   Retirement is something different to everyone, but it does not come true for anyone unless it is planned.

Other things to consider about retirement planning include where do you want to live? Do you want to stay in your current home or do you want to downsize and move it to something smaller and maybe more affordable? This, of course, raises the question of family. Do you want to live near family or are you in adventurer and ready to try a whole new section of the country or the world?

None of this will happen unless you plan for it. Nothing is worse than reaching retirement and having no idea what to do with your time. This happens more often than might be imagined. People who have worked their entire lives, been at the center of activity and found a purpose in work are often at loose ends when they wake up one day and have nowhere to go.  Nothing keeps us as young as having a purpose. But having a purpose in retirement does not just happen. It takes thoughtful consideration, planning and execution.

So financial retirement planning is important, but so is the emotional side of retirement. To have a happy fulfilling retirement, know what you’re going to do with your time when the time comes that you are no longer an employee. This can be the most exciting time of your life, a period when you can do what you have always wanted to do but never had the time.  It can be full of tremendous freedom, but freedom can become a noose if it is too sudden and too unstructured.  Plan carefully for your retirement, and it will be a happy, successful one. Do not plan for it, and it could be a time of stress and boredeom.