Getting the balance right with your retirement planning
The two extremes with retirement planning are: to go into retirement with no plan; or to over-plan.
No plan means you’re beginning a substantial part of your life (perhaps 20 to 30 more years) with no direction. Over-planning leaves no space for spontaneity—which is one of the major delights of retirement.
The key is to focus on what’s important with your planning.
1. Planning for your health
Without reasonable health, your retirement will be limited. It’s important. Having good health means you can do things. Make things happen. Experience different things. Develop that hobby.
Good health is key.
Unfortunately, we’re in a world where finances tend to be what people think about when they consider retirement. Money is important—I’ve rated it at number 3 here—but there’s no value in working so hard on your finances that you lose your health. Here is a description of how this can happen.
In simple terms, health comes in a package that includes: A good diet that’s plant-based; exercise and movement—and to keep moving; listening to your doctor and doing the regular tests; and checking your family history for what might be there.
2. Planning with people in mind
And this starts at home—particularly if you’re a couple. Here are some questions to consider. Are you planning to retire at the same time, or at different times? How do you envisage that working? What are you thinking of doing together and separately?
This conversation needs to happen well before retirement so you’re aware of each other’s expectations. The freedom of choices created with retirement can make this the best time in your relationship.
Then there’s family. Retirement can be a time for reconnecting with family members you’ve lost contact with. This can be a part of your plan.
There’s increasing emphasis on the importance of developing social connections—here’s a post that looks at this. Keeping in contact with people leads to better emotional and physical health. Now is the time to begin some of those connections.
3. Planning for your money
You do need to approach retirement with more of a financial plan than what Richard G Wendall, in Retire with a Mission, calls ‘fuzzy math and rosy assumptions’. That’s too much of a no-plan approach.
There also needs to be some realities addressed. For instance, it isn’t unusual for spending to increase in the first couple of years, particularly if you’re thinking of an extended holiday and home repairs.
Of course, the earlier you plan to get the money right for retirement, the more you can work on it and the more it can work for you.
Back to the extremes
No planning means you will use the first part of retirement to work out what you’ll do. Unfortunately, some who do this become very annoyed and depressed with the time it takes or, worse-case scenario, never come up with what they want to do.
Over-planning will limit your freedom. In Wendell’s words, you ‘shouldn’t start with a full dance card. You should be able to make up the program as it goes along—that’s a major part of the fun and the poetic license that retirement permits’.
No one gets the balance exactly right before retirement because you do learn as you experience it. However, it’s important to avoid any extremes that will limit living a fulfilled life when you retire.