Strategies for avoiding retirement pitfalls
Retirement is a hard-earned destination, but often folks lose the golden sense of this season because they just aren't properly prepared for life in this stage. After saving for years, their retirement path can seem stuck in a rut, or even painfully off course. Most long for this season to be the capstone of their lives rather than just a bookend. As they consider how to flourish financially and personally in this time, here are a few important strategies to guide the way:
Strategy No. 1: Have a financial plan and a life plan. Many retirees have had good financial investments, but what got them to retirement might not be the best strategy to get them through retirement. A financial plan in retirement is required. Reducing investment risk and increasing income are just two of the major shifts their portfolio needs to undergo. Plans include having money structured specifically to meet the retiree's income needs, neutralizing the risk of catastrophic life events, and making sure they have proper documents in place for any assets to get to the right folks, with minimal delay and effort, and the least taxes being due. Planning for retirement should include more than just having enough money.
When most folks prepare for retirement, they primarily focus on finances – their money track. However, their life track can be even more important. Retirement is the great lifestyle reset, when responsibilities and requirements are replaced with wide-open options. The identity retirees once had in their careers is set aside. When they say they are a retired teacher, banker, electrician, etc., that says more about who they once were than who they are now. It's vital that they create a new identity for who they want to be that provides enjoyment as well as fulfillment. It's important for retirees to reflect on what their life purpose is now that they no longer work.
Strategy No. 2: Get the advice needed. The professionals spend their time and energy so that retirees don't have to. Whether it's advice from a life coach on how to reinvent themselves, or guidance from a financial planner to align their investments with their present needs, getting expert assistance is vital. For example, many retirees who handled investments themselves in their working life may benefit from considering engaging a retiree advisor who specializes in handling specific concerns for folks in this stage of life. They include how to get the income they need and make sure it lasts for their entire lives, reduce taxes, and protect what they have from life events like needing long-term care – things retirees might not have given any thought to when they were working. Using professionals well can empower retirees to flourish in their life and money tracks.
Strategy No. 3: Get connected. Community becomes more important as people become less competitive. For some, that means being more flexible, and seeing people more as collaborators than competitors. It may mean trying new things or reconnecting with parts of their lives that were once important but got crowded out by other priorities. With retirement comes a potentially new circle of friends with different interests and points of contact. Doing it alone is a drag. The focus should not just be on having fun, but creating connections that lead to enduring relationships. Retirement is most enjoyable when people are doing the things they enjoy most with those they love the most.
Strategy No. 4: Be decisive. Decisions should be viewed as empowering opportunities to direct the retiree’s life. Being decisive will free them to move in a direction they want instead of subjecting themselves to the lingering doubts, confusion and worry that may come with uncertainty. It’s important for retirees to make purposeful decisions about what they want their life to look like and put themselves on a path they are confident and energized about.
It’s important for retirees to take time to invest in their well-being by considering the long-term impact of current and ongoing choices. Especially in retirement, it's important to be intentional and realign their resources (time, energy, and money) with what's most important to them.
