I’ve been saying for years that planning for retirement can’t just be about cash flow and now it seems the world is starting to listen.
You see there are hundreds of thousands of people out there who thought they had enough to retire on – then came Covid, the Ukraine crisis and the macro-economic meltdown. A perfect storm caused their funds to diminish in value almost overnight, along with their dreams of a stress-free future.
Traditionally, retirement planning has involved a trip to a financial advisor, some thought about pensions and investments and our appetite for risk. Ask an overworked forty-something what they want in retirement and I’m sure nine times out of ten they’ll reply, “rest, relaxation and freedom.” The reality is, however, very different.
Sunshine, sailing and a daily glass of sauvignon blanc may be heaven for a while, but trust me, the novelty will soon wear thin and then what are you left with? Isolation, loneliness, depression, despair, loss of self-worth and a dwindling social life. Not quite the dream retirement after all.
Money can’t fix any of that so let’s forget the financial situation for a while and focus on the things we should consider with equal importance when planning for, or even just thinking about, life after work.
We spend so much time at work that what we do inevitably becomes a part of who we are. It forms our identity. “I used to be a doctor, teacher, account manager….” I hear this all the time, and when I ask what these people are or do now, they look at me blankly, unable to answer.
When we retire, our purpose and identity disappears with our work persona and, with it, our confidence and self-esteem. I’ve been there, and it’s distressing, which is why I urge everyone to consider what their new purpose will be well before they have to.
If you need some help with this, then check out my blog.
Finding our tribe
There has been lots in the news recently about ‘The Great Unretirement’. People going back to work in their late fifties, not just because they had to, but because they wanted to. Turns out many of those who took early retirement during the pandemic have returned to the office not because they miss their work but their workmates. It’s little surprise to me. We’re human, wired to crave social connection.
The problem is that, like purpose and identity, our relationships are often intrinsically linked to our work. Say goodbye to the day job, and many of the friends you’ve made along the way will disappear too.
That’s why it’s crucial to consider finding a new tribe in retirement. People who are on the same wavelength as you, friends who share your life goals and values. Making new friends is hard at any age – harder still when you don’t have the security of a shared workspace or young family to help you on your way. And yet, it’s probably more important than at any other time in life, as social connection is paramount to good mental and physical health and longevity.
Talking of longevity brings me nicely to my next point – your life goals. We boomers are lucky. We’re likely to live for another twenty to thirty years after we retire. That’s a hell of a lot of time at our disposal, but to use this wisely, we need to plan ahead. And be mindful of the fact that as we age, we won’t feel as energised or as mobile as we do in our early sixties. Charting our life goals and the likelihood of achieving them is more than a bucket list. It needs careful planning and execution. Seize the day is my advice.
Now I know I said this wasn’t about money – and it’s not, well, not really. This is about friends and fulfilment first and then additional funds!
Here in the UK, the government is desperate to attract the over-55s back into work, saying their inactivity is to blame for rising inflation rates. I understand what they’re trying to do and why, but they’re going about it the wrong way. Over 55s don’t want to go back to their old line of work or continue in it for longer than they choose, but they do want purpose and an additional income stream in retirement.
That’s why I encourage my clients to find something they’re passionate about, a purpose that fulfils them and can be an additional income source. One woman I worked with had always wanted to try beekeeping. She went on to sell local honey. Another client made an exceptional amount of money carving beautiful garden benches, a ‘job’ he enjoyed immensely. Another wrote a book. My list goes on and on…
Remember, nothing is impossible. Ray Kroc started McDonald’s when he was 52, Colonel Sanders founded KFC at 65 and Arianna Huffington was 55 when she launched The Huffington Post! And, if you want any more incentive to start a startup or side hustle, a recent study concluded that a founder who is fifty years old is 2.8 times more likely than a twenty-five-year-old to have a successful business.
Proof that, as I always say, age and experience matter. Don’t let the years pass unnoticed. Plan ahead so you can make each and every one count. If you are keen to discover more about retirement planning, please get in touch.