WHAT YOU PLAN FOR RETIREMENT AND WHAT YOU GET IS OFTEN VERY DIFFERENT

Why it’s important to look beyond the money when preparing for this life stage.

I find it fascinating to witness the progress of my clients as they move towards their new lives and how they handle the transition from full-time work to retirement.

I have had the privilege and honour to walk the path over many years with many of my clients and witnessed how their careers and businesses bloomed, their families matured, and finally, how they transitioned into retirement. For many, it was plain sailing most of the time; for some, however, the challenges of walking away from the life of a business executive were not easy. Frankly, some people find it very hard to let go of corporate life.

As consumers, we are used to broadly knowing what to expect if we read the packaging of a new product we buy. What you see is what you get. The label says it all. If only retirement was as easy …

All of us get grilled with financial information. By the time we retire, we have heard over and over that we need capital/assets equaling 16+ times our final annual salary, that drawdown rates should not be more than 4%, that our investments must beat inflation, and the advice goes on and on.

Don’t get me wrong, financial stability and accumulating enough capital for retirement are crucial. Without enough capital, retirement is really going to suck and aggravate the issues that I am going to mention in this article even more. However, it is not only about the money.

Everyone works with retirement in mind unless they are Warren Buffet. Young people and the more mature of age often refer to “the day I retire”. Some say it with eagerness; others mention it with apprehension. Some say it because they loathe their job, and others think of it in sadness because they love their job. Although timelines may differ, we all realise that we will move away from our daily jobs someday. What we do not realise is that retirement may look very different from what we planned and expected. Some may love it, and some may hate the new environment …

Given my passion for helping clients plan for retirement to ensure they “get it right” and prompted by my own retirement ambitions (someday), I realised there is so much more to retirement than just the figures. By heart and expertise, I am a financial planner first and foremost. Still, after experiencing the challenges so many face before and into retirement, I decided to expand my expertise and explore the area of retirement coaching. I am convinced that by applying the principles of financial planning and retirement coaching, my clients will be much better served because it is not just about the money. Retirement guidance needs so much more.

So, what have I learned thus far? Firstly, studying becomes harder as you age! That is one of the facts that we must accept. But alas, I have also learnt the importance of continued mental development. I don’t want to jump the gun here, but one of the most important factors to ensure a healthy, successful retirement is cognitive stimulation and development while you are retired. An active mind is a healthy mind, and a healthy mind goes a long way to ensuring a healthy body. This does not mean you must now achieve your doctorate in archaeology when you are retired (unless you want to). There are many ways to achieve brain stimulation/development, and some are actually fun! 

As usual, I digressed again.

I intend to start a series of articles and booklets backed by recorded webinars to help clients heading towards retirement and in retirement with the challenges they face. I would like to help them create a roadmap to guide them on this treacherous path. Without delving into too much detail, I would like to elaborate on some of the challenges soon-to-be retirees and retirees face:

• What you plan for in retirement and what you experience can look very different. Many people expect sunshine and roses, long walks on beaches every day, or, in short, an extended life-long holiday. The realisation kicks in when the dark side of retirement rears its head.

• Retirement is rated 10th out of 43 measured stressful events. It is important to be aware of these challenges and avoid common pitfalls to prevent stress from taking control.

• Getting the balance right between mental, social, and spiritual aspects will go a long way to setting you on the right retirement path. Without attending to this, the following challenges may occur:

• You may experience the “honeymoon phase”, where everything seems perfect, and then you realise something is missing one day.

  • Waste the first few years trying to figure out “who am I?”

  • Why doesn’t retirement look and feel like I thought it would?

  • Question your decision to retire.

  • Dwell on the past.

  • Worry about what could have been done differently.

  • Struggle to lead an active lifestyle due to physical ailments (you or your spouse).

  • Feeling robbed due to the loss of a spouse, friend or family member, divorce.

  • Frustration with adult children.

  • Feel unappreciated and rejected.

  • Feel isolated due to declining hearing and vision.

  • Loss of confidence.

  • Anxiety and depression

The above can be managed and, in many cases, overcome by developing certain skills, including:

• Communicate about difficult issues.

• Learn how to say “No!”

• Schedule daily activities, learn new things, meet people, etc.

• Rekindle old passions and forgotten hobbies.

• Explore different work and volunteer options.

• Learn from mistakes, and don’t dwell on the past.

• Letting go of a grudge and being able to forgive.

• Feeling gratitude.

• Developing a “realistic optimism” about life and ageing.

The dark side of retiring

Retiring has its challenges. As we age, the probability of things going wrong with our health increases, and at some point, we may have to deal with one or more of the following. It may not be us, but someone close to us:

• Heart attack, stroke, fractures.

• Macular degeneration (AMD).

• Depression.

• Anxiety, cognitive impairment, mood disorder (these conditions are not considered to be part of normal ageing. 20% of people aged above 55 have mental health disorders).

• Suicide (15 out of 100 000 people over the age of 65 commit suicide in the US).

• Substance abuse.

To prevent and manage the above challenges, we must adopt a practice of positive psychology that will lead to successful ageing.

It is important to have more than one lens to see the importance of planning for non-financial aspects.

Move from what can go wrong to what can go right. Establish what makes life worth living. Let’s thrive, not only survive.

In future articles, I will delve more into the various aspects of how to age successfully and retire well. In my next article, I will elaborate more on the five areas that support successful ageing. These five areas can be referred to as PERMA and are fundamental to successful ageing.

P = positive emotions (we need three positive emotions to counter one negative emotion). In this case, negative trumps positive.

E = engagement (finding flow).

R = relationships (loneliness is two times more lethal than obesity).

M = meaning (being involved in an activity that is larger than oneself).

A = accomplishment (goals infuse our lives with structure).

I have reached my publication space limit and barely scratched the surface. There is so much to deal with on this topic. I look forward to interacting with you further on this subject. You are welcome to email me directly at marius@wealthup.co.za if you wish to join my retirement community, which is not only for retirees but also for people who plan to retire in the next five years or so.

Take care and plan well.