WHAT IS THERE TO GET READY FOR?
A large bulk of our working population is now moving towards, entering, or already in retirement. Statistically they will retire earlier, wealthier, and live longer than prior generations. Retirement has drastically changed over the past few decades for these reasons. Gone is the notion of retirement as a perhaps short but permanent vacation. It is now more a marathon than a sprint: based on life expectancy alone Canadians retiring at 65 can expect to live twenty years on average. Researchers, psychologists, and therapists are seeing people stuck in a post-retirement void, their social networks disrupted, confidence diminished, and routines lacking. Depression and divorce are on the rise in retirees faster than any other segment of the population.
Much like other life-changing events such as marriage or divorce, retirement is now recognized as a long period of emotional adjustment in terms of our relationships with others and perception of ourselves. Although the names vary, psychologists and researchers are attempting to define stages of this transition, namely pre-retirement planning and anticipation, the initial euphoria of The Big Day, the Honeymoon phase, the disenchantment that comes after the initial high, and the reorientation to a new routine. Naming these stages can help guide those planning retirement or who have retired.
PLAN AND PREPARE
Our working lives start a phase of accumulation: get a car, a house, maybe a spouse, some children, recreation toys, and property. Although saving from the start is important, it is only later in our careers, as we get a handle on our expenses and our incomes are rising, that we establish the bulk of our saving for retirement. As retirement nears we tend to look ahead and plan for its bigger components. Where will we live? Will we have pension income? How much savings do we need to provide for what the income cannot? Often overlooked are more personal questions related to what we will do with the sudden surplus of time, lack of work-related socialization, and loss of structure and routine.
THE BIG EVENT
Retirement comes with a round of smiles, handshakes, farewell parties, and celebrations. Some are muted and sporadic; others are gala events comparable to weddings. This cessation of employment is the shortest stage in this process.
Once the retirement celebrations are over we enter a period when the newly-retired start doing all of those things they were looking forward to doing once they stopped working. This time of travel, hobbies, visits to relatives, and lazy mornings is also referred to as the drunken sailor stage of retirement, a relaxation bender, if you will.
After the initial emotional high of the honeymoon many retirees must deal with a feeling of letdown. Getting back to the business of living can lead to a creeping up of feelings of boredom, uselessness, and disenchantment. The objective of a successful retirement is to retire to something instead of from something. Retirees must build a new sense of self and find new purpose. We remain healthier and happier when we have purpose, whether that translates to a second career, volunteer activities, deeper involvement with our families, or building social networks outside of work. Finding truly meaningful engagement in retirement may come naturally, or take longer than expected. Planning, experimenting, and involving those close to us in this reorientation of our lifestyles are all necessary. Financial planning is but a part of this picture; an early start and regular review of your financial situation will ensure it is not a deciding factor in what your retirement looks like once it arrives.
VR Business Brokers would like to thank Nicholas J. Miazek CFP for his contribution as a Guest Blogger on our site. Nick is a Vice President and Financial Planner with Fiera Capital Private Wealth in Calgary, Alberta, where he provides customized wealth management solutions and implementation services. Nicholas can be reached at firstname.lastname@example.org or (403) 699-9000.