Getting the Most Out of Retirement

By Rick Brooks

Did you know that the fastest growing demographic group in the United States is people over the age of 85? As health care improves, people are living longer. Most people today can expect to spend about one quarter to one third of their lives in retirement. Which begs the question: are you prepared for that change in your lifestyle? Riley Moynes, author of the book “The Four Phases of Retirement,” doesn’t think so.

The financial press tends to focus on money and retirement. Do you have enough saved up to retire? Can you afford to maintain your lifestyle? What will your income and spending look like in retirement? And frankly, for a lot of people, these questions don’t have good or easy answers. But in actuality, these are the easiest questions to answer.

The surprising problem most retirees run into can basically be summed up in two words: “Now what?” According to Moynes, there are roughly four phases of retirement:

Vacation. Not surprisingly, the first phase of retirement is relief and relaxation. You’re free to do whatever you want, unchained from the boss and the daily grind. This is when leisure activities and checking off the ‘bucket list’ predominate. According to Moynes, it lasts about one to two years.

Feeling Lost. When we retire, we tend to lose structure, identity, relationships, and purpose. This is especially true for men who typically don’t build strong social relationships outside of work and can lead to higher rates of divorce and depression.

Trial and Error. This phase begins with the question “what can I do to make my life meaningful and productive again?” It often involves trying to find something other than personal gratification to motivate and encourage you. And it is rarely a straight-line journey, often involving false starts.

Reinvent and Rewire. This can be the true happiness phase of retirement, often characterized by a renewed sense of purpose or mission. One of the reasons for this is that renewed purpose or mission can also provide some of the structure that is lost when you retire. It also often involves serving others in some way.

While Moynes’ research focused on finding a renewed sense of purpose and meaning, an 85-year Harvard study (begun in 1938) found that the most common thread among happy retirees was social connections. People don’t miss working, but they miss working with people. According to a Forbes article on the topic, “a good social life:

Provides a sense of belonging and feeds our personal identity.

Adds meaning to life and strengthens self-worth.

Provides support, making it easier to handle problems and keeping stress levels in check.

Gives us something to do and someone to do it with.”

Social isolation, it states, can be as risky to your health as smoking 15 cigarettes a day. The Harvard study recommended looking at your existing relationships and trying to understand what makes them good, and figuring out how to enrich and continue those relationships in retirement, or what to look for in new ones. These questions included:

Who are the people I most enjoy working with, and what makes them valuable to me?

What kinds of connections am I missing that I want more of? How can I make them happen?

Is there someone I’d like to know better?

Who is different from me in some way (thinks differently, different background, different expertise)?

What can I learn from them?

Moynes quotes the Harvard Business School study as saying that “The unhappiest retirees had not gone on to do anything productive beyond pleasing themselves.” His interviews with fellow retirees, and the research done by sociologists and psychologists, all suggest that a happy, healthy retirement requires more than just a bucket list. You are more likely to enjoy retirement with a sense of purpose and community, with people you appreciate and who appreciate you. Sound finances may be just the icing on the cake.

This column is prepared by Rick Brooks, CFA®, CFP®. Brooks is director/investment management with Blankinship & Foster, LLC, a wealth advisory firm specializing in financial planning and investment management for people preparing for retirement. Brooks can be reached at (858) 755-5166, or by email at rbrooks@bfadvisors.com. Brooks and his family live in Mission Hills.

Category: Business, Finances, Local News, Seniors