From a planning perspective, I think it is important to address what you will be doing in retirement. I've talked before about what your money will be doing when you retire. However, one of the biggest mistakes I find people make is not thinking through what their retirement will look like. Many people don't have a strong understanding of the transition process they must go through as they move to this next stage of life.
One of the most valuable lessons one can learn when it comes to planning for retirement is the necessity to prepare for this new chapter. There are many studies that indicate that the people who are truly successful in retirement are those who have taken the time to understand how to fill the time in their daily lives which used to be concerned with "work."
We go to work for many different reasons. It is not just the paycheck. Work provides us with a reason to get up in the morning, a place to go, interaction with other people, a sense of achievement or purpose, and much more. So when you leave the workforce, you will be leaving many of your friends and a big part of what had defined you for many years. It is crucial to the success of your journey into retirement that you step back, before you retire, to understand what your retirement will look like.
Before you leave the work force, sit down with your spouse and/or family and have a long conversation about what you wish to accomplish in the next phase of your life. What passions do you have? What hobbies will you explore? Those who have a place to go to, a hobby or passion to pursue, will have the best probability of having a "successful" journey into retirement. The 40, 50 or 60 hours a week that you earmarked for work can now be replaced by important tasks that could include the pursuit of a second or third career, volunteer activities, grand-parenting duties, more rounds of golf and much more. You should take on the task of mapping out your retirement at least one year before you expect to retire. Obviously, if you have been retired involuntarily, you won't be able to go through this task ahead of time; however, it is still important to properly plan retirement just as you would have if you had the option to retire voluntarily.
The retirement journey is driven by many factors, not the least of which is the economics. However, many of my clients define a successful retirement with the following statement: "I don't know how I had enough time to work before!" They are so busy during the working years that the successful retirement is defined by what they are doing, not what their money is doing for them. Certainly these two will go hand-in-hand when defining a successful retirement, and you must spend the proper time doing the necessary planning.
As you plan for retirement, think of it as opening up an entirely new business and needing to plan for its success. You cannot just hang a shingle outside the door, sit behind the desk, and hope you will be a successful business person. You will need to put down the proper business plan and allow for the flexibility to make the changes necessary so that you can fully enjoy your journey into, and through, retirement.
About Mark Singer
Mark Singer is a CERTIFIED FINANCIAL PLANNER™ professional and the author of The Changing Landscape of Retirement–What You Don't Know Could Hurt You. He has been The Retirement Guide to thousands of investors for close to 25 years and is the creator of the Retirement Roadmap and the Financial Organizer System, both of which contribute to a solution to investors' greatest concerns–properly coordinating their financial affairs. These systems have become a primary resource for the people who have worked with Mark over the years. You can download the first chapter of Mark's new book for free by Liking it on Facebook.