1/2 + 1 + 5 = A great approach to retirement planning
Over the past few months, I’ve interviewed quite a few people in the ‘industry’ about retirement. This formula (½ + 1 + 5) came up a few times.
It makes so much sense that it should become common—as in common sense and common knowledge.
Too often, when thinking about retirement, we see it as this massive block of time. After all, retirement can last for 20, 30 years and even more. I find it hard to imagine what I’ll be doing in 20 years’ time.
This is where the formula comes into play for retirement planning.
Planning the first ½ year
For most, the first six months of retirement actually takes little planning because it tends to care for itself with such things as: a holiday; renovations; cleaning out the garage; working in the garden; setting up an office/studio/craft room, and so on.
However, retirees will tell you that the first six months goes by pretty quickly. Then what?
Former policeman David never actually got to that point before he had to find another job to keep his sanity.
When he retired the second time he had purpose. I’ve met others who reached their sixth month and went back to work because they simply didn’t know what to do with themselves. Boredom had set in.
Planning the first year
This is where the serious planning comes in. It starts with questions such as:
- What do I want to get out of this new freedom I have?
- Who do I want to connect with?
- What are the passions I want to follow? The skills I want to use or develop?
- How can I get closer to the ones I love?
- How can I support the causes I want to?
- Do I want to earn an income of some sort? How?
Having answered these questions, it’s worth drawing up what you think a regular week would look like in your retirement. You aren’t tied to it, but it can help clarify what you will do in retirement.
Done well, the first year can set you up for the rest of your retirement.
Planning the first 5 years
This is a bit harder—but not as hard as trying to imagine 10 or 20 years. However, if you live in a cooler climate, it could include such things as going to the sunshine every winter.
It could be planning to change your car at the end of the 5th year.
At some time you may want to set a 5-year deadline to consider downsizing to make living at home more achievable. It’s better for you if you make that kind of decision when in good health than to have it forced upon you because of poor health.
What’s important to you in this period of your life? That’s the question you’re attempting to answer. It also allows you to recognise that the ageing process needs to be allowed for.
Living on purpose
If you were to update your yearly and five-year plans on an annual basis you will be taking charge of your life. Of course, this is not meant to be a straight-jacket to your life. There needs to be room for spontaneity.
What it does do is help you live on purpose. That’s the value of the ½ + 1 + 5 formula to retirement planning.
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