The Soft Side of Retirement PlanningPlanning for Retirement
Author: Clayton Johnson
Retirement can be scary. In my experience, many pre-retirees often feel anxious or fearful about retirement. For most people, work is not only their primary source of income, but also their primary source of meaning and biggest occupier of their daytime hours. It is no wonder that 1/3rd of all men over 65 become depressed within one year of retirement or that most retirees say they do not enjoy their first year of retirement. It seems no coincidence that the highest suicide rate for any segment of the population is men over 70.1
I believe a contributing factor to these sobering facts is our inability to appropriately plan for the retirement phase of life. When most people think of retirement planning, they only consider building up a “nest egg” that will be big enough to last a lifetime. That is certainly part of it, but one of the most important aspects of preparing for retirement is the qualitative soft side of the plan.
The Life Plan
We all dream of a fulfilling, satisfying, and successful retirement, but to do that requires some effort to find what is profoundly important to your life plan. The life plan looks beyond the numbers. It is the vision and purpose for your life and informs your retirement plan.
In their book, Your Retirement Quest, Alan Spector and Keith Lawrence show the “10 key elements of a fulfilling retirement.”2 These form the building blocks of your retirement life plan.
- Life Purpose – Create a purpose statement so you can align activities with that purpose.
- Passions – What do you love to do? What makes you lose track of time?
- Attitude – A positive attitude improves quality of life and longevity.
- Financial Security – If done well, you can focus on the meaningful, non-financial aspects of life.
- Giving Back – Retired volunteers have lower mortality rates, lower stress, & higher morale.
- Healthy Relationships – Spend real, personal time with friends and family.
- Growth – Keep your mind active and sharp. Use it or lose it.
- Fun – Plan for fun and have spontaneity in your life.
- Well-Being – Create the personal energy to do what you want to do.
- Retirement Life Plan – Have a diverse portfolio of meaningful activities.
When to Retire
Lastly, I want to touch on one of the most asked retirement questions, “When Can I Retire?” This simple question is not as easy to answer as you might think. Larry Swedroe and Kevin Grogan point out four questions to ask yourself in their book, “Your complete guide to a successful & Secure Retirement.” When you can answer yes to all four, it is time to retire.
- Do I have enough? This identifies whether you have a sufficient level of financial security.
- Have I had enough? Your career may no longer be your passion.
- Will I have enough to do? Have you found a diverse portfolio of meaningful activities?
- Does my spouse/partner want me home 24/7? Have you had crucial conversations with your significant other to be aligned in your plan?
Notice, I have not mentioned anything about investments, withdrawal strategies, asset allocation, RMDs (Required Minimum Distribution), or any other technical aspect of retirement planning. These have their time and place, but to prepare for the successful retirement we have always dreamed of, we first need to consider the soft side of our plan.
1. Swedroe, Larry E., and Kevin Grogan. Your Complete Guide to a Successful and Secure Retirement. Harriman House Ltd, 2021.Spector, Alan, and Keith
2. Lawrence. Your Retirement Quest: 10 Secrets for Creating and Living a Fulfilling Retirement. Cincinnati Book Publishers, 2010.