Planning for Retirement – 5 Factors to Consider Beyond Your Finances
Written by: Martin X. Shields, CFP®, AIF®
When couples or individuals plan for retirement, they are primarily focused on their financial picture and whether they have the income and assets to cover their expenses. What they often fail to plan or consider are the other factors that will drive happiness and fulfillment in retirement. In the past 30 years, there have been extensive studies completed on other factors that allow for a successful retirement, and the following five areas stand out as the most important.
- Good Health
- Relationships with Peers and Community
- Purpose and Mission are Crucial
- Structure is Important
- Relationships with Children are Important but not the Foundation for Retirement
Good Health is Top of the List
Start Healthy Habits Early
It is not surprising that one of the most important factors to leading a fulfilled life in retirement is good health, but research has shown that there are many facets to what that means. First, the best way to have good health in retirement is to start taking good care of yourself in your early 50s. People who developed good balance, muscle mass, strong bones, healthy eating and lifestyle habits before retirement are most likely to continue these actions through retirement.
Mental Health Matters
There can be many challenges in retirement that are either not expected or overlooked and this can impact a person’s mental health. As individuals age, they tend to have more anxiety and can become more isolated. Being open about these challenges to one’s mental state and being proactive to prevent them or seeking care can sometimes be challenging because of the stigma that is still associated with mental healthcare, but it needs to be a priority. It has also been shown that implementing a consistent practice of meditation and yoga can help reduce anxiety and limit mental stress.
An Ounce of Prevention
Although society has made many medical advances, we are unfortunately not in a position to stop the onset of many diseases, but we are in a position to treat them effectively if they are identified early. The odds of successful treatment can improve dramatically if there is early detection. This requires annual checkups and meeting the suggested screening requirements.
Relationships with Peers and Community
Of the studies completed on retirees one of the most extensive is the Health and Retirement Study completed by the University of Michigan that tracked 20,000 retirees from 1994 until 2018. One of the areas they highlighted as extremely important for happiness is relationships with friends and community involvement. What many people transferring to retirement do not realize is that their job provides social connections that provide a great deal of support to their happiness. When people are working, they often want to get away from social interaction during their time off because they make up so much of their day. They also don’t appreciate that they need to build these social and community connections as they approach retirement so that when they are retired, they have these connections in place and they don’t need to spend time building them.
According to Forbes, “Social isolation, in contrast, is as high a health risk factor as obesity and smoking 15 cigarettes a day. On the psychological side, self-esteem can be weakened and there’s a higher risk of depression.”
Purpose and Mission are Crucial
One aspect of retirement that surprises many people is how much their job meant to them as far as a sense of self and providing a purpose in life. This reality tends to be more pronounced in individuals who retire early especially if they have been very successful, and they expect this sense of relief and happiness when they retire but in fact, they have a void that is hard to fill.
A good approach to meeting this need is to consider retirement a new job with great benefits. In a study completed by Dr. Nancy Schlossberg, she suggests that individuals complete a values and personality assessment to help them determine what will bring them this sense of purpose without providing increased stress. Spending time on this before you retire can make sure the transition into retirement is smoother. It has also been shown that developing both short- and long-term goals will provide individuals with a sense of accomplishment that they are used to experiencing when they were working.
Structure is Important
When individuals first retire, one of the changes they like best is the lack of structure and not having to be on a schedule. This provides a sense of control and relaxation they lacked when working and is one of the biggest reductions in stress for many people. But this benefit tends to fade over time and what they find is a need for structure in their days, weeks, and months. This need for structure doesn’t mean that they have every hour of a day scheduled but it does mean that for any given week there are commitments they have that may be business or health-related but they also may relate to community, friends, or family.
Relationships with Children are Important but not the Foundation for Retirement
Individuals planning for retirement often think that they will spend a great deal of time reconnecting with their children and often move to be closer to their adult children. Retirement studies have shown connecting with adult children can be important but often those children are focused on their own lives and their ability to reciprocate is limited. Retirees find that making children the focal point of retirement does not provide the sense of fulfillment they were hoping for, and they need to assess where they spend their time.
Our Approach to Retirement
At Bouchey Financial Group, we spend a great deal of time working with our clients on what their retirement will look like, and although the discussions tend to start with how the finances will support their retirement a large part of our counseling is related to the non-financial components that can be as important but are often overlooked. If you are starting to plan for retirement and want to get holistic guidance, please feel free to contact our team for a discussion.
Bouchey Financial Group has offices in Saratoga Springs and Troy, NY.