Before you stop work, think about how you’ll spend your time
But in this new era of retirement, planning shouldn’t focus solely on finances. Without doubt, money is a huge part of retirement planning — probably the most significant part — but it’s not all of it.
When planning for retirement, having a balanced approach that considers both life (what it will look like on a day-to-day basis) and finances will help you achieve the most positive outlook. You must prepare mentally and emotionally for what happens when you actually retire.
What do you picture when you think about your retirement? It’ll be different for everyone. Is it the luxury of sleeping late and not rushing to the office? Is it the fear of losing the thing that gave your life the most purpose, and maybe your identity — your job? Or is retirement the opportunity for you to do something very specific with your time on your terms? This could mean volunteering, studying photography, writing the novel you never had time for, traveling or even working 10 to 15 hours a week for your former employer or some other organization.
As I look into the future, I dream of running a community-sustained agriculture (CSA) farm. In the most traditional sense of retirement, that dream is about 20 years away, but I’m imagining right now what it will take to make that dream my future reality.
What does retirement mean for you? Write down a list of specific retirement goals and then try to trim it down to your top five goals. Be creative. Start a collage or a journal with photos, magazine images, words and phrases to help you visualize your goals and make them more concrete. Or start an online community for people imagining retirement. Hearing others describe their plans can enhance your own perspective.
In retirement, as you start to achieve your goals, you can revise your list or go deeper into the goals you’ve already established — it’s an ongoing process. The idea is to look into the future and imagine what you want this next phase of life to be like.
Better yet, try retiring a little bit every day. Get involved in something you think you’ll want to do when you retire and see if it is a good fit. You may discover that tutoring elementary school kids isn’t what you thought it would be, or maybe it’s even better than you had ever imagined.
As I imagine running a CSA farm, I’m also visiting some farms that are already operational. I’m learning how to do it, finding out the resources I’ll need and how to identify locations, and learning how to get people involved and how to keep it sustainable.
I love imagining and taking time to retire a little bit every day, but as a finance specialist, I know I can’t do this without an eye toward preparing financially. The recent recession has significantly affected both retirees and employees. Countless people lost their financial footing and some even postponed retirement or returned to work to replenish their savings. Sadly, some folks near retirement don’t have savings, a pension or a 401(k) plan to fall back on.
Some of these individuals struggle to imagine retirement because they’re fearful of living solely on Social Security. Even so, it’s crucial to dream beyond finances; everyone should think about how they’ll spend their time. Visualizing the retirement you want in detail can even help you discover how to make it happen, even with challenging financial circumstances.
The closer you get to retirement, the more important it is to understand how Social Security works and how to decide when to start collecting this monthly benefit. For some, Social Security will be central to paying for the bare necessities. In general, the longer you wait to collect Social Security, the larger the benefit. AARP’s Social Security Benefits Calculator can help you figure out the best scenario for you and your family.
Preparation is the key to a successful retirement. Examine your financial circumstances. Map out your goals and dreams and then try them out. There’s much more to retirement planning, but these two parts will help you see what you’ll need to do before retiring.
If you’re concerned about your finances, don’t be afraid to ask for help or start learning more about how to save and fund your retirement vision.
AARP’s free website has a lot of resources to help you live your best life on retirement planning, investing, estate planning and Social Security.
You’ve worked too hard to leave your retirement years to chance. Plan now.