The Un-Retirement Plan

Most people dream of retirement. They want to plan for what sort of travel are they going to do, how much time they are going to spend with their family, the grand kids. You know, maybe it’s going out golfing, there’s just sort of a little bit of a lack of responsibility when you get to that stage of life and it’s exciting. I am going to go the other direction and talk about the un-retirement plan. The reality of retirement is, the bank accounts no longer growing. Now you’re starting to use that money for retirement so you’re seeing that shrink which might be a little bit of an eye-opener. And retirement may bring, you know, a shrunken pool of potential social interactions. So some people may start to get bored or maybe they have this lack of purpose that they may feel when it comes to retirement. There is a concept of un-retirement where it’s rising. And according to the Pew Research Center one in five people over age 65 is employed. And almost double the employment of the same demographic 35 years ago. And according to a T. Rowe Price survey, approximately half are going back to work for the money. So that means, there is the other half that’s doing it for other reasons. So, sadly a majority of people go in to retirement, they may not have a specific plan for their retirement. They’re just simply wining it, which isn’t the ideal route to go. You’ll want to map out a consistent plan that you’re going to follow as far as a budget and figuring out all of the finances. Along with that, we’re seeing that people are living longer. In the past, people would maybe plan for, okay what does retirement look like for the next 20 years. Well now you might have to plan for 30 plus years, depending on your life expectancy. And according to that same T. Rowe Price study, approximately half are rejoining the work environment for social or emotional benefits. And retirement may be the hardest psychological adjustment that people ever make. You figure it’s, you’ve been in that work environment maybe for 40, 50 plus years of your life. How do you just all of a sudden flip a switch and not go to that work and that mindset that you had? So here are the top four social and emotional reasons people flunk their retirement: One is the loss of identity. You know they think of it as basically it’s permanent unemployment. Number two is loss of structure. You know, you get into that daily routine, you know when you’re going to work, what the next day brings and it’s drastically different when you get to retirement. Number three, the social network, depends on your work. But you may experience regular interaction with a variety of people. Number four, potentially it’s marital stress. Maybe your spouse isn’t used to having you home all of that time. And so, all of a sudden that might create some tension in the household. So how do you prepare yourself so you don’t flunk retirement. For the next 6 to 12 months, let’s take a few minutes every morning and write down what you’d be doing if you were retired. So again, you’re sitting there thinking, okay let’s imagine if I’m retired, what am I going to do today or maybe this upcoming week and you start to go through that exercise. You know, have you considered volunteering? What about being a consultant? I’ve seen a number of clients of ours where they’ve retired from the career but they still want to be actively involved so then they are able to become a consultant in the industry that they worked. And so that gives them a little greater flexibility as to when they work. Yeah, the income is not going to be as high but you’re still going to have a lot of that social interaction as well as that concept of giving back. And financially, map out a long-term plan. If you don’t have a financial advisor, if your advisor hasn’t really sat down with you to map things out as to what your finances look like over the next 20, 30, 40 years, that’s going to be important. So, go through that exercise. And from a long-term plan, you know it’s really time to re-visit that idea. You want to factor in what is inflation going to look like. And it’s tough to predict a lot of this, along with potential tax changes, what’s the market risk. So there’s a lot of different variables but it’s something here at Centennial Wealth Advisory, we offer a no-cost, no-obligation visit and we’d love to sit down with you to help you plan to retire well.