Thursday, October 28, 2010

Five Things You Can't Afford to Overlook in Retirement Planning

For most of us, the mere mention of "Retirement Planning" conjures up financial concerns and anxieties: Will I ever have enough money to retire? How much is enough? Will I ever really be able to retire? Is long-term care insurance worth the price for me? Where do I begin with serious estate planning?

To be sure, those are all important considerations.

But planning for the emotional transitions of retirement is equally important. How do you begin to prepare? 

Start by asking yourself the following questions.

Why do I want to retire?

When you dream of retiring, is it to escape your present reality? To do things you really want to do? To embrace a new phase of life? All of the above?

If most of your retirement dreams focus on getting out of the rat race, ditching a necessary but dreary job and being free, you may find retirement a let-down. What?? It's true. When you think mostly of running away from a less-than-thrilling life, you may find yourself thinking "What now?" after the initial euphoria of not having to get up at 4:30 a.m. for the big commute begins to wane. I see some people here in my own community who look for random ways to fill their days that are as passionless as their workdays might have been.

If you dream of retirement to pursue interests long-deferred, think of starting to do these things right now even with your busy work schedule. You may be able to bring new satisfaction into your life today even if retirement is years away. Think of this as building for retirement as surely as you put money into your 401K every month. Building interests, skills and pursuing your passions are all part of preparing for a satisfying retirement -- and a more fulfilling life at the moment.

If you dream of embracing a new phase of life, that's a positive. But beware of the fantasy that life will be a dream as you morph into the person you always wanted to be. Remember the saying "Wherever you go, there you are." Transitioning into a new phase of life doesn't mean you'll be a different person, but the same person in new circumstances.

Since I retired from everything but writing earlier this year and moved to a new community dedicated to fitness, wellness and continued education, I still struggle with my weight, which began to climb when I was in my forties. I still love sweets a bit too much.  The difference is that I'm in a setting and a phase of life when daily workouts and healthy meal planning are easier. There's no excuse at all for fast food on the run. And so I'm losing weight, getting firmer, feeling healthy. Regaining my health and fitness was a major retirement goal for me -- a goal I started pursuing before I left my job in Los Angeles and a major part of my lifestyle here.

My neighbor Larry retired late last year from an executive position. The timing seemed right for a lot of reasons, but, once retired, Larry found he wasn't quite ready for a life of leisure. So he is taking charge in a new way by assuming a leadership role in the community and making a difference in a variety of wonderful ways. He's bringing himself with all his organizational skills and high energy into a new passion for community involvement.

When you're asking yourself why you want to retire, it really helps to have a higher balance of positive rather than negative reasons. Envision yourself running to and eagerly embracing a new phase of your life rather than running away from the tedium or worse that you feel on the job.

2, How do you want to retire?
Some people retire gradually, switching from full-time to part-time work in the years just prior to their planned retirement. My husband Bob worked four day weeks the last three years on the job. While this meant taking home less money,  that extra day off, on his own, gave Bob a great headstart on pursuing new interests and structuring a satisfying day alone.

Some people try a gradual retirement with one spouse retiring before the other.  My cousin Caron has done this and she loves the time to see girlfriends, take classes and help to care for her grandkids. Her only complaint is that she wishes she had more leisure time with her husband who only recently cut down from full time to a four day a week arrangement at work.

For some, gradually easing into retirement with part-time work or one spouse retiring before the other, is a way of making this life transition a bit less jolting. It can be especially helpful if you're not quite sure what you want to do once retired. Gradual retirement allows you to test the waters before taking the plunge.

3. When do you want to retire?
For many people, a particular age spells retirement.  Despite current economic realities (or, in some cases, because of them) Baby Boomers are showing a decided preference for retirement at age 62, despite the permanently lower Social Security payment each month.  If money isn't an issue and you really want to retire at that point, there's no reason you shouldn't.

But there's also no reason you should -- just because you're 62 or 65 or 66 and can retire. If you're not ready, why do it?

That's the reasoning of a friend I'll call Corrine (she's a very private person and doesn't want her real name used). Corrine has been with the same company for more than 30 years, enjoys an executive salary and perks and can look forward to retiring with a great pension as well as Social Security benefits. Especially since things are increasingly tense and unrewarding in the culture of her company, her co-workers are stunned that she isn't thinking of retiring now that she is 62.  "I don't want to retire just because I can," she says. "My  greater question is 'What will I do when I leave here? How can I continue to make a difference?'" She is starting to imagine a plan for volunteer work and mentoring with a certain population of women. But for now, she's content to stay put on the job. Her feeling is that retiring prematurely and finding herself wondering what to do next would be more painful for her than dealing with the daily tension of her workplace -- at least for now.

If you really look at what you want in your life now and in the future, you'll know when it's time to retire. And if you're like some Baby Boomers, that time may be years off -- or maybe never.

4. Where Do You Want to Retire?
Some people can't imagine leaving a long established hometown near family and friends. Others enthusiastically take to the road in an RV and live no particular place for years. In between, there are people who choose a retirement home in a new setting or who spend part of the year in their hometowns with another six months in a sunny retirement house or condo.

What's right for you?  Give yourself time -- lots of time -- to consider what would work.

Ten years ago, my husband Bob and I used to dream about retiring somewhere in Hawaii, one of our favorite places on earth. Then, especially as house and condo prices zoomed into the stratosphere, along with the expense of flying to the Mainland to see family and friends, we began to reconsider.

We thought about staying put in our long-time home in Valencia, CA. It's a wonderful community and we loved our modest little home. But there were minuses, too: most residents of Valencia have long commutes into downtown L.A. or the West side of L.A. as we did.  Although our neighbors were lovely people, they tended to be considerably younger and, like us, had demanding work schedules and horrible commutes. No one was in the mood to socialize. Garage doors slammed shut the minute the commuters arrived home. We had some cherished friends in L.A., but our families lived out of state. Every day we battled the traffic, we thought more and more about life with a slower pace, a home in a more rural area.  We also decided that if we were to move, we would want to go to an area with more affordable home prices where we could pay cash for a house with the proceeds from selling our little house in L.A.

 After years of researching communities that were a feasible drive from Los Angeles, so we could occasionally come back and visit friends, we settled on Anthem Merrill Ranch, about half way between Phoenix and Tucson. It includes an all ages section as well as an over-55 section, so isn't exactly a geriatric ghetto. And the community focus on health, wellness and continuing education was just what we wanted.  For us, as we settled into a home twice the size and half the price of the one we left behind and got to know a whole new crowd of lovely neighbors who were as open as we were to new friendships, this was exactly the right choice.

But it wouldn't be for everyone. My friend Pat lives in a lovely home overlooking all of Los Angeles. She inherited this home from her parents and has been working hard to make it uniquely her own while cherishing its connection to her past. Being close to her friends, family and church are all very important to her.  She's a wonderfully adventurous person, but choses to pursue her adventures in travel and in being open to new people and ideas, not in resettling -- and that's exactly the right choice for her.

Making peace with the person you are and what you want in life is an important part of shaping your retirement destiny. Some people we've met here have bounced from one active adult community to another from here to Florida, seeking retirement nirvana. And they're still dissatisfied.  It may well be that where you retire is less important than the thought that goes into it -- what you want and expect and how you deal with the pros and cons you'll find with any decision about where to live.

5.  What will you do?
That's a major consideration.  It helps to have a game plan beyond simple leisure or you may find yourself glued to the couch, the t.v. remote in hand, waiting for your next meal -- and feeling painfully disconnected from life.

Think about things you love to do, causes you'd like to pursue, good works you now have the time and energy to do -- and do these! Set priorities. Have a plan.

My husband Bob's passions in life are music (he plays several instruments), reading and learning.  We're regulars at three local libraries. He is taking classes on everything from theoretical physics to Arizona history and he plays the guitar for at least an hour or two a day, expanding his repetroire and soothing his spirit.

My plan, when I walked out of my office at UCLA for the last time this past April, was to spend the first six months of retirement relaxing, establishing a daily exercise plan, eating sensibly and making friends. No more getting up before dawn. I slept in until -- gasp! -- 7 a.m. It felt deliciously decadent. Bob and I have hit the onsite gym and lap pool nearly every day. And I've spent long, languid afternoons in the outdoor recreational pool getting to know my neighbors. Now the second part of my retirement plan is kicking in: continuing to do all those good things, but also getting back to writing and considering volunteer possibilities.

It's an ongoing process, this life transition, but having a plan from day to day, week to week, helps to ensure that you can do all the things you really want to do.

Paying attention to the emotional aspects of retirement planning is critical in making sure that you retire only when you're ready and in a way, place and lifestyle that is right for you.  As with any transition, there are bound to be some difficult days, times when you have a lingering thought of looking back on your life and wondering what might have been if you had chosen a different path, times when you wonder if you can make a difference once again, times when you have to remind yourself that episodes of depression or anxiety are endemic to the human condition and not a sign that your life is meaningless or that retirement was a mistake.

But when you have given careful thought to why and how and when and where you will retire and what you will do once you reach this life transition, the daily rewards can far exceed even the best of your pre-retirement fantasies!

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