POSTED: May 1, 2023
Once you reach a certain age, retirement creeps into your mind. You watch friends do it, your partner talks about it, there are pieces on the news about it. Much of the world’s population is quite young, but the western parts of the world are aging fast and its only immigration that is not making it worse. This whole generation of baby boomers has retired or is just about to retire.
Just the word retirement brings out crazy feelings in people ranging from elation to dread. For some of us who have not accumulated “stuff” to sell or mortgage, or the credits to a pension or other income retirement in the conventional sense, is not really an option. Similarly, for those who have worked in the gig economy or otherwise been self employed or on contract work the whole retirement thing is not as binary. Just dial back the amount of work to make life a little easier as needed is the way to go. No gold watch, no cleaning out the desk, no drunken goodby party with coworkers.
So what I mean by retirement is that traditional version – you work at something for forty or forty five years and then you stop working at that and have the income to do whatever you want without worrying about the financial side of the equation.
This has been raised in my consciousness recently by my friend Peter’s sharing with me that he is going to retire. Now unlike some friends who, like him, have worked regular jobs, largely for others and have been counting the days to stop going to a repetitive job, where their work has been eclipsed by younger, higher energy, better educated or trained people or not very personable microchips, he always enjoyed his work and has usually been senior enough to drive the culture, the work ethic, and the focus of the company’s activities. He has enjoyed his work life and had by all accounts a successful career and has I think accumulated those pension credits and paid off the debts and can do retirement fairly well financially. No regrets on the work life, but its now time to retire and do something else.
Like a lot of people he has a partner who has been chomping at the bit for him to do so. They have watched friends do round the world trips, or pursue specific hobbies at a higher level, moved to a cottage or downsized the house and bought a second home.
I don’t have any first-hand experience with retirement. I expect I will never retire as some would argue I never really got started. But as Peter is going into this with some trepidation and because I know so many people who have worked the conventional jobs and then retired, I decided to do a little survey of them to get any insights on what to expect and what to do and what to avoid. Part of my motivation for this endeavour came from the painful exercise of watching my friend Jose who loved her job as a physical education instructor at a private school, who had decided to retire and was encouraged by many to do so. She put in her notice for a school term ahead and then was loving her work even more with the knowledge it would soon end and reversed her retirement plan. She still sits on the fence on this.
What follows is my understanding of the various things told to me by these friends who have all retired from conventional jobs and gone on to have fulfilling lives after their careers. Some of the advice is expressed in the negative and some in the positive. Some have some real scars to show for their bad decisions, while others rave about how fabulous retirement has been.
DON’T TRY TO DO EVERYTHING IN THE FIRST YEAR
What came up more than once was the overindulgence in the first year from a pend up demand for a change. Many commented that they travelled too much in the first year but hardly appreciated the expensive trips they were on. Their suggestion was that if travel is a real interest to plan one big trip per year and to really research it before hand. Learn some of the history, a bit of the language, understand the culture and the politics and geography. Then go and try to travel with a greater depth of understanding. The word savour comes up a lot when talking to retirees.
The same applies to starting a new small business or moving to a different community or changing houses. You have the time. It doesn’t all have to happen right away. Take a deep breath, do your homework and enjoy the journey – don’t just devour it and then look up and burp!
TIME IS NOT OPEN ENDED
While the first point above was raised by many, almost the same number commented that there needs to be a healthy recognition that the time ahead is not endless. You may live a very long life. I have two friends in their nineties that I could certainly win against if in a boxing ring or foot race they would still win a debate with me on any topic. But too often there is a physical element or two to slow us down or otherwise impair our abilities. And the most insidious thing about aging is not the deterioration of our health, but that if we have a partner we don’t deteriorate at the same rate. One persons bad hip may hold up both for certain activities.
The point here is that at sixty or sixty-five if you have three or four things you would really like to pursue, recognize that if competing in a triathlon is a goal, its not for your eighties but for your sixties.
DON’T OUTLIVE YOUR FINANCIAL RESOURCES
Ah, money. It came up a lot in my chats. It is clear to me that the world is made up two kinds of retired persons – those with a pension and those without. Good pensions that have some benefits and a steady and inflation adjusting income are what let you take that out of your stress basket.
The relationship of money and health came up a lot too. What does it take to go into a retirement home or have home health care at some later point? Those numbers are a bit scary and need to be considered, particularly if you live in a place that does not provide these things as part of a government programme.
While the comments came from retired people in all walks of life, a common bit of advice was to be honest with yourself when looking at the future and your finances. Property taxes, groceries, utilities etc. will all keep going up in cost – will your income move with those costs or be eroded over time? Can you realistically work part time if your costs and income don’t match? Perhaps for the short term, but not over the longer haul.
Sit down with a big pot of coffee and a calculator and set out conservatively what your income will look like over the next twenty years and what your expenses will probably look like over that period. It will tell you just how much you can spend each year on those trips or dinners out. It is also the exercise that has kept many from taking the retirement leap.
MAKE NO SMALL PLANS
This title sounds grand doesn’t it. What it needs is the tag line or caveat below within your resources and capabilities. When chatting with very elderly people I have learned that very few regret trying something – even something that turned out to not be the best thing for them financially or that did not live up to their expectations. If you have worked as an accountant your whole working life and always loved flowers and longed to have a flower shop, it may be better to have that flower shop for a least a few years, even if it does not work out perfectly financially.
There was a time when retirement really meant retiring from and not retiring to. This is a fundamental distinction. A head chef I once worked for had a little tattered and stained cartoon up by his meal planning area. It showed two old fellows sitting in a boat fishing. The dialogue box said “I don’t really like fishing, but I like golf even less”. The implication was that these were the only two things you could do in retirement.
The really interesting thing is how much this time is like that period right after high school or university when you have your whole life ahead of you and you get to do whatever you want. Don’t waste it. So think big and make those changes or undertake those projects (within your resources and capabilities).
THE RIGHT THING FOR RIGHT NOW
Like the comments earlier about being realistic about setting the different goals for different stages of your retirement, the notion of the right thing for right now is an important one. I have talked about this before and it is simply the idea that an activity or pursuit doesn’t have to be forever, but might be the perfect thing to do for a time, and then have as a memory. The beach house or country cottage may not be sustainable in terms of costs but might be a possibility for a few years.
STRATEGIC & TACTICAL
I don’t tend to think of things as either strategic or tactical. Strategic are those decisions that are fundamental building blocks to achieve long term outcomes, while tactical are just those opportunities that come up from time to time that are beneficial to pursue. A formation for a soccer team and plan is strategic, but an error by the other team creating an opportunity to score is a tactical opportunity.
A few of my better educated friends went on at some length about how this applies in retirement.
Have a series of plans – short, mid, long term that will help you fulfill yourself. Anything that supports these should be a real priority as they are strategic.
But sometimes opportunities come up that are tantalizing. They need to be evaluated as whether they support, are neutral or a negative relative to your longer- term strategic goals. At earlier stages in life you can go off and pursue these tactical opportunities, sometimes for years, and still have a chance to get back on track later. But in your retirement years I have learned you can only pursue those tactical opportunities that are positive or neutral to your longer term strategic goals as you wont have the time to recover.
I had not really thought about it in these terms but now that I am and looking back, I wish I had thought this way earlier in my life.
LET OTHERS IN ON YOUR PLANS
If you are a couple you need to think about these things individually and then see how you can mesh it all as a couple. A tough challenge I think, but a necessary process.
If single, several friends told me they found it, in most cases, rewarding to share their longer term plans with their children, siblings and close friends and often had some valuable feedback. Feedback is good, particularly from those you are close to and respect.
GOOD LUCK PETER
This whole exercise I set off on was triggered by my buddy Peter telling me about his plans to retire, and I hope these comments help. The truth of it though is that he is a fellow who is one of those methodical, honest people and good thinkers who everyone would like to have in their lifeboat. I expect he is all over these concepts already.
If any readers have comments, I don’t have a comment section but send me comments on your retirement experience and I when I have enough will do an update to this post at some point. firstname.lastname@example.org