Retirement: Ready or not?

As I do the Retirement Readiness courses, I meet a range of responses to the participants’ retirement plans from “I can’t wait” to “I am just not ready”. The latter have a long list of financial and psychological realities that cause them to doubt their timing. I hear the following comments regularly:

“I love my job. I feel useful, engaged, and important. I would miss it too much.”

According to the Sun Life Financial 2012 Unretirement Index, 39% of those approaching retirement do not want to retire. These are often well-educated as 56% of those with post graduation degrees work longer than average. They may be entrepreneurs who identify strongly with their businesses or career artists or musicians who “are what they do”. They may be workaholics who have very little outside of their work to sustain them psychologically. They are often in good health and, like Woody Allen in To Rome With Love, associate retirement with a form of dying.

“I just do not think I/we can afford to retire.”

According to that same Sun Life research, 47% are worried about debt in retirement and 61% feel they need to work beyond 65 to sustain their lifestyles. Other studies put the financially worried figure as high as 72% of preretirees. They may have late blooming adult children or other dependents, household debt, a large expense coming up, a considerable loss of savings and investments in the last few years, or no private pension or financial plan or idea of what their needs will be in retirement. Many want to work more flexible hours, part time, on contract, or continue full time.

Often older workers price themselves out of the market or their productivity may go down or be perceived to go down, and employers introduce them to retirement with a pink slip. That is a sudden and shocking way to start retirement. It feels like a rejection, an ego blow. That employee may want to renegotiate a new deal before that is the case. It may mean part time or contract work, flexible hours, a different work load or position. This may give a better sense of control to both employer and employee.

“I do not know what I will do with myself. I am not one to sit around and do nothing.”

These are folks with few hobbies or interests outside of work and family, who get bored on weekends, do not like to travel, have not explored their interests, aptitudes, dreams, or options. They do not have anything to retire to, and nothing has been put into place to replace all that work has provided in terms of scheduling, meaningful contribution, and activities. These are the fall-off-the-cliff-like-Wiley-Coyote when they retire people. Many retirees say they have never been busier, but it takes some time to figure out what you really want to be doing. You need to feel a sense of purpose, engagement, and control over your life. The earlier you put that into place, the more confident you will be going into your retirement. I have met people who have a serial retirements. They have retired two or three times before they had what they wanted and needed outside of work.

Just as a financial plan can give you a sense of confidence and direction, a retirement plan can help you know when you are ready to retire.

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