The Missing Piece of Retirement Planning

Search for the term “retirement planning” or “planning for retirement” on Google or watch the latest ads on TV or read some of the articles in magazines-and the primary message of being ready for retirement involve one of two things-the amount of money saved or age.
While not wrong, it leaves out a critical piece of the decision about when and if one should retire.
I recently read two marketing pieces put out by financial firms that used the following phrases, each of which are very typical in advertisements about retirement: “How to know when you are ready to retire? [in their Free Guide], and “7 Questions to ask yourself before you retire?” The message (advice) often provided is that the decision when to retire is strictly defined by money or age.
So, what people see and hear as they approach retirement is - when I reach a certain age and/or attain a certain portfolio size, I can retire. Or, put another way, our age and portfolio size are the primary determinants of whether we can retire.
When this message is heard over and over during our lives, we tend to believe it and take it as gospel. People also see their parents, friends and coworkers following the same traditional path into retirement.
However, for many people, retirement is not the final phase of a linear life path previous generations glided into, worn out from a long and physically demanding career with a shorter retirement awaiting them.
The money is important, don’t get me wrong. We need to have the right level of savings and income to finance the type of retirement we want - to be able to participate in the kinds of activities and spend our time in the most valuable way we can.
With longevity increasing, and with inflation affecting all areas of our lives, the amount it will take to fund our desired lifestyle is going up. Add to this the rising cost of health care and long-term care and there definitely needs to be a focus on the financial side of planning for retirement.
But what if we turned the focus of planning for retirement to first figuring out how we want to spend our time during this phase of their lives?
Take the time to learn about your personal aspirations during this time:
What will you do to fill your time that brings you meaning and joy?
How do you want to divide your time between labor and leisure
Do you want to continue to work? If so, would you want to continue working in your current career or doing something different?
What will your identity be if they leave your career?
How will you stay healthy and active?
And, most importantly, what will your purpose(s) be? I prefer to have people create a portfolio of purposes instead of a singular one. What will get you up each morning with enthusiasm and excitement?
The guide mentioned above, based on these non-financial questions, could just as easily be: 7 Questions to Ask Yourself Before You Retire. But in this version, it has nothing to do about money.
These are just a few of the many questions clients nearing retirement need to consider. There are many other great questions included in the book, Longevity Lifestyle by Design to ask yourself depending upon what area(s) of retirement that may be causing uncertainty, stress, indecision, or just feeling “stuck” and unsure of your future direction.
So, the next time you see an article titled “The 7 Questions to Ask Yourself Before You Retire” begin by answering the NON-Financial questions to define who you will be, what you will do, and how you will spend your time in retirement. Then, let the answers to these answers to these questions drive the decisions about the financial questions.
Ask yourself:
How will the money I have invested for retirement support my retirement lifestyle? If there are gaps on either side of the plan you can make adjustments. The earlier you begin planning the more time you have to make these adjustments.
If your NON-Financial wants and needs for retirement are identified first, then the planning for the financial aspects becomes more understandable. You are better able to see and understand how your money is connected to the life you want to live.
Put these two pieces together to design your ideal retirement.
This article was originally published on My Life's Encore and republished with permission.
About the Author:
Reid Stone, MBA, CPRC is the Founder and CEO of My Life’s Encore (MLE). MLE was founded to help clients answer the question “What is my life’s encore?” – to plan for what comes next for us after a long career but with many productive years left to explore, contribute, and make a difference. Reid is a Certified Professional Retirement Coach (CPRC) and is a member of the Retirement Coaches Association (RCA).