Three out of four people have made a serious effort to plan financially for retirement. But
what may be surprising is that only one out of three people have made a serious effort
to plan emotionally for retiring — that is, truly visualising what retirement will look like
and thinking through what will bring fulfilment.
Whilst you may be in good shape financially, new retirees often struggle with the
transition, navigating boredom, loneliness or maybe even purpose. This is likely because
they didn’t consider the emotional side of retirement, let alone put a plan together for
it. This needs as much attention as the financial side, so people should make sure
they’re not just retiring ‘from’ something but have also determined what they’re retiring
‘to.’
The Five W's
People need to truly visualise their future retirement, and we suggest thinking through five
specific areas of their lives: Who, What, Where, When and Why.
Who do they want to spend time with?
What activities do they want to engage in?
Where do they want to live?
When do they want to retire?
And why will they get up in the morning, that is, what will give them meaning and fulfilment?
Carefully thinking through these five W’s, means you will have a better understanding of
who you are and who you want to be in retirement, and you can then move on to create
a personalised action plan to get there.
For example, if continuing to work is part of your ‘What,’ think through what kind of work and how often — and then plan for that. If the ‘Where’ is different from the place you live now, do some research on your options — costs, weather, health care, etc.
Each person will differ in their own unique responses to the five W’s, and the depth and
content of those responses will impact their retirement plan and how prepared they
might be. One way in which retirees differ is in how they manage money during
retirement.
While conventional wisdom assumes most retirees wish to maintain their lifestyles
throughout their retirement, research suggests that 70% of retirees identify more as
‘savers’ who hope to maintain and even grow their pot of gold during retirement and are
willing to adjust their spending and lifestyle to do so. Are you a spender or a saver?
No two people necessarily have the same vision, so it’s especially important that couples
discuss life in retirement to ensure they’re on the same page. Better to find out before
retiring than to come home one day and see a ‘for sale’ sign on your front lawn!
Even how much time a couple plans to spend together is something to discuss. Taking time to individually answer the five W’s, and then comparing them with one another before making decisions, can help smooth the transition.
From a Financial Planner’s perspective, the more we know about you the better
we can help!
Answers to the five W’s will provide insights into the goals you are trying to achieve, and armed with that information we shall be able to highlight financial solutions and investment strategies today that will help achieve your goals long-term.
Having a good understanding of what must happen today to achieve those goals tomorrow, is invaluable.
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