We view retirement planning through a financial lens trying to calculate that “magic number” that will sustain a comfortable lifestyle. Our minds gravitate towards numbers and financial preparedness. We focus on savings targets, investment returns, and withdrawal rates, calculating how much we need to retire comfortably.

In this process, we often overlook a crucial aspect – what will we do with our time once we retire?

Retirement is not a mathematical problem to be solved but a profound life transition that requires deep and thoughtful consideration.  It starts with making choices that align with your values and aspirations. You need to clearly envision what a fulfilling retirement looks like for you. Once you have a clear vision for your retirement, the next step is to align your financial strategy with your desired lifestyle.

The traditional view of retirement was one of relaxation and leisure. The idea that retirement is a relatively uneventful static chapter in life is changing radically in a dynamic world where we are living longer, and retirees are increasingly redefining what it means to “retire”. It is not just about retiring from your current full-time working environment but rather about starting a new chapter of life filled with purpose and fulfilment.

Retirement is a major life transition and a dynamic phase of your life where you step into a new identity. The retirement planning process must be flexible as people’s values and goals evolve over time. You need to reassess your retirement strategy as life unfolds and your circumstances change. You need to be flexible. The mindset is changing from “what I want to retire from” to “what am I retiring to”?

Focussing on the financial side of retirement to the exclusion of your health will negatively impact your retirement. Good health is a cornerstone of a fulfilling retirement. Your health in retirement will be determined by your choices in the preceding years. What you eat, how much you sleep and how you move is within your control. Small actions lead to great change over time if it is done with intention and consistency.

Social connections are crucial for emotional well-being. Plan how you will maintain and build relationships in retirement. Loneliness can be a significant issue for retirees, so fostering a strong social network is essential. Don’t rely on your professional relationships after retirement; you will lose contact with many people that are currently part of your professional identity. Your identity shifts in retirement.

Life is unpredictable, and flexibility is key. Be prepared for changes in your health, family dynamics, or even financial situation. Having a flexible mindset and a contingency plan can help you navigate these changes more seamlessly.

Retirement planning is much more than ensuring financial security. It’s about crafting a lifestyle that brings joy, purpose, and fulfilment.

“Change is constant. For advisors, helping clients adapt to and work through significant transitions calmly and with confidence is an underrated superpower”. – Brian Portnoy

The numbers are important, but the life that you live is what truly counts.

 

The above article was written and adapted by Marius Kilian.