In its ongoing commitment to educating Covenant members and friends about saving, the Covenant Presbyterian Foundation offers many excellent strategies and tips. In this following article, CPF Chair Megan Poore, a financial advisor at Lucien, Stirling and Gray Advisory Group, writes about an unexpected aspect of retirement -- the emotional component.
You have put pen to paper, you have spent years saving, you have a plan (and a plan B, and even a plan C), and you have your date picked and circled on your calendar – RETIREMENT DAY. Even after all this hard work, there’s still one aspect of retirement you should prepare for: the emotional component.
Here are a few tips for ensuring that you don’t spend your first week of retirement bored and wondering “what’s next?!”
Have an “exit strategy”: Many people say it was harder for them to walk away from their jobs than they expected it to be. Your colleagues have become your friends, and what you do in your career has become a key identifier for who you are and how you describe yourself. Gradually scaling back your hours, for example, switching to part-time from full-time, may give you the opportunity to preview what leisure time in retirement will feel like. After years of receiving a paycheck, you may find that suddenly not receiving one anymore leads to anxiety even if you know you’ve done your financial planning. While working part-time, you’ll also still earn money, which may alleviate some of that anxiety.
Think about what you want to retire to: While much of your identity and time may currently be wrapped up in your career, you will be well-served to have a few things lined up to look forward to once you’re retired. Your casual hobby may become a more full-time endeavor. Your schedule is suddenly free for volunteering and attending events for your grandkids or nieces and nephews. Travel is an important retirement goal for many people – and it is certainly something to look forward to!
It’s helpful to think about retirement this way: “I retired from ______ and retired to ______.”
Now, instead of just introducing yourself as a retired teacher, you can say “I retired from teaching, and retired to being a full-time tutor.”
Review your spending: To answer the question, “How much money do I need for retirement?" you must know how much you spend. How much you REALLY spend. Not the number you think you are pretty sure you probably spend. This will inform both how much money you should set aside in cash (in my practice, we recommend two to three years’ worth of living expenses) and will better position you or your advisor to figure out whether or not you can continue to live at your current level. After you track your spending, you can factor in travel costs or the vacation home you’ve had your eye on, etc. You may discover that you have more financial freedom in retirement than you expected.
Build some structure into your day: Having a plan for how you’ll spend your days gets you out of the house. Without one, you could end up spending all day staring at the TV if you’re not careful. Meeting new people and finding new opportunities is much easier when you’re spending some of your newfound free time away from home. Within your community, there are probably many daytime activities that you have previously passed up on because they didn’t fit your work schedule. Here at Covenant, there are a numerous wonderful ways to spend a morning or afternoon, for example. Explore your options and be proactive in your activity scheduling so you can look forward to your new version of normal.
Preparing yourself mentally and emotionally for retirement is nearly as big a task as preparing yourself financially for retirement, and it is certainly as important. Put in the effort now to benefit from a more seamless retirement transition.
For more information about Covenant Presbyterian Foundation, please visit covenant.org/foundation or contact Duane Dube or any Trustee: Elizabeth Christian, Everard Davenport, Larry Faulkner, Helene Maham, Megan Poore, Scott Ream and Kristin Schell.
Covenant Presbyterian Foundation supports Covenant Presbyterian Church by assisting donors to be Faithful to Generations, during and beyond their own lives, by receiving and growing their gifts, and using them to help fulfill the donors’ glorification of God.
One generation will commend your works to another