I’m a Financial Advisor. A big part of what I do is help people plan for retirement, whatever that may be for them.
I hear a lot of jokes from people. “I’ll never be able to retire. Freedom 55? More like Freedom 95!” But I’ve found that what people are really saying when they joke about it is they can’t imagine what “retirement” looks like. On the surface it is a money question, certainly. But it’s much bigger than that. Planning for retirement means also to plan for a day when you wake up in the morning and have no particular place to go. Apart from the money question not know what to do with yourself day in and day out can be just as scary, maybe even more.
When we speak of retirement planning we need to expand the discussion to include not just how am I going to pay for things when I don’t draw an income but also how am I going to fill my days?
Dr. Stephan Rechtschaffen, in his book “Timeshifting” puts it this way;
Paradoxically, the one aspect of aging we look forward to, the one we “can’t wait” for, the one we “put in our time”, to achieve, is retirement. But once we get there, we hit a wall.
We hit a wall because we spend all of our time planning the money aspect of retirement but we don’t give more than a passing thought to the time aspect of it.
My father “retired” in 2005. For years leading up to it he planned his money, invested wisely and started a side business as a cabinet-maker. The plan was to work in the garage making furniture and small wooden trinkets for local craft stores and special orders, do a bit of consulting with his old employer and travel with my mom. Within a year he was back to work 3 days a week because he had too much time on his hands and missed the schedule too much. He turns 74 next month and has no intention of slowing down any time soon.
My father-in-law on the other hand retired in 1999. He planned his money just as well, if not even a bit better than my dad, and invested in a vending machine business. His plan was to service the vending machines for a few years and slowly wind that down as his health failed him. Unfortunately he had no experience in running and business and didn’t do enough research into it. The business didn’t really take off the way he had hoped so he shut it down after a year, fell into a massive depression and has spent the last several years virtually “marking time” and waiting to die.
Both men are well positioned financially. They had good advisors throughout their lives that guided them on the road to retirement. My father-in-law has a solid government pension and my dad has a medium-sized nest egg in RRSPs, a bit of Real Estate and still pulls in a small salary from his part-time gig. They are not hurting for cash. What neither man had however; was a good “time plan”.
There is a lot of talk in the financial planning world about the fact that people are living longer. This talk understandably focuses on the fact that we need to make our money last a lot longer than we used to. With the average lifespan reaching 80 years and up in North America the average retirement is now lasting 20 years or more. That’s a lot of time to make money last for and financial planners need to be good at identifying risk and return. But it’s also a lot of time to sit around playing Bridge. As in the case of my dad, people are healthier and stronger than ever before. I swear at 74 he could still work circles around me at any physical task. In this day and age, expecting someone to retire and simply stop being active is unrealistic and in many cases just cruel.
Fortunately the tide is changing. Psychologists and other professionals are starting to open practices designed to help people make a more holistic plan for their time in retirement. This RRSP season why not take a few minutes with your financial advisor or other professional planner and talk about what you want to do in retirement, not just how you’re going to pay for it? You might be surprised to find that you aren’t as prepared as you thought.
For more information on a more holistic approach to retirement planning, write to email@example.com