Retirement planning beyond running the numbers

I recently met a woman who was trying to decide whether to retire from a demanding yet fulfilling career. She got me thinking about how common it is for people to have trouble deciding whether they are mentally ready to retire, regardless of their financial situation.

Just as I was pondering this, I attended a presentation about the personal side of retirement from my colleague Susan Zimmerman, who is both a Chartered Financial Consultant and a Licensed Marriage & Family Therapist. I’d like to share some key points about retirement life planning that stood out to me.

Happiness and purpose

While many people rightly focus on whether their investment portfolio sets them up for retirement success, they might also want to look at their “happiness portfolio,” as retirement coach Marianne Oehser calls it, or even a “purpose portfolio.” In these, your asset is time rather than money, and the various activities you engage in are your diversification.

While retirement may seem like an endless vacation, most people can’t vacation forever with no purpose and meaning in their lives. Some purpose-related questions to consider include:

• What do you want to add to or subtract from your life?
• Do you want to start a business or do volunteer work?
• What activities do you plan to engage in?
• Which people in your life are most important to you?
• How do you want to be remembered?

 Is retirement the answer?

You can build a happiness or purpose portfolio in many ways. Sometimes retirement enhances it, and sometimes not. Ronald E. Riggio, a professor of Leadership and Organizational Psychology, suggests these four questions to explore whether retirement is the right choice:

• Do you enjoy your work? Does it provide a sense of meaning and purpose in your life? The higher the enjoyment, the better to delay retirement.
• If your work is stressful, is it retirement you seek, a change in role, or a change in careers? What you value should be your guide.
• Does your work provide critical social needs in your life? If yes, stay with it until you have cultivated other social networks.
• Are you prepared psychologically to retire? Establish realistic expectations, stay engaged and productive.

A client recently recommended retirement coach George Dow or the organization NavigateForward to help with retirement life planning in a similar way that we help with retirement financial planning.

Consider your partner

We’ve talked before about how partners negotiate retirement goals. Just as couples often disagree on what retirement looks like, they may also disagree on when to begin or whether to retire at different times.

Finding common ground begins with talking about your wishes to prevent assumptions and misunderstandings. A 2018 Fidelity Investment survey found that 43% of 1,600 people surveyed didn’t even know when their partner planned to retire.

And the communication doesn’t stop once you’ve agreed on timing. Susan shared these tips for couples navigating retirement together from a Psychology Today article. They are excellent advice during retirement and can also be helpful during the planning stage:

• Be patient with each other.
• Be curious and supportive of each other.
• Notice changes in thoughts, feelings, and behaviors.
• Don’t expect your partner to entertain you during retirement.

While there are many ways to approach the decision to retire, the bottom line is that the emotional and psychological aspects of a retirement plan are as important as the financial ones. And that means they deserve as much thought, conversation, and exploration as you give your finances.