Why good retirement planning is about much more than money

When we think about helping clients prepare for retirement, the focus tends to be on target savings levels, asset allocations, drawdown plans, and how to manage the timing of Social Security and Medicare benefits. We ask folks to estimate their spending needs, quantify their appetite for risk and set goals. But is this driving success?

How much do working Americans know about what they want? If the idea of retirement is solely about escaping a job, we’re setting people up for disappointment. Images of travel, golf, gardening and sailing fill retirement dreams, but is this enough to generate satisfaction, or will the luster start to dull? Instead, there are other, equally important factors to consider when planning for retirement.

Identity and purpose
We spend countless hours of our lives at work. Over the years, this can become a significant part of our identity. We lead conversations with, “I am a [insert job title].” So if this turns into, “I was…” when we retire, who do we become? We naturally build identity around what we do and may need to be more intentional about who we are outside of careers and family. We need to build other identities to shift into or face an abrupt loss of self.

Connection
For many, one’s primary social network comes from their career: co-workers, clients and even friends in related industries. As we age, it’s important to be more intentional about curating relationships and building connectedness. We want a fulfilling retirement. Mental and physical wellbeing are linked to a number of factors, one of the least of which is financial security. Social connection is found to be of much greater importance to longevity, esteem and health.

Aging and care
The generation currently entering retirement may be experiencing difficult conversations with their own aging parents centered around several key questions. What level of care is needed, how do they plan to fund it, and are they willing to change their environment? As people start to have these discussions and see their peers going through similar ones, it might lead to more openness about planning for their own aging process.

There are a growing number of resources to help people explore these considerations, but when we view each in a vacuum or focus solely on asset accumulation, we can miss opportunities to find a holistic approach to retirement planning. Throughout our working lives and phases of retirement, there are questions that can help design a clearer picture of what a meaningful retirement looks like: What does work or caring for your children mean to you? Are there other areas of your life — hobbies, volunteering — that give you a sense of satisfaction? What might you be interested in learning more about?

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Retirement could become an opportunity for a second career. Colonel Sanders started his Kentucky Fried Chicken franchise in his 60s. We look to part-time jobs if supplemental income is necessary. For those with less immediate need, this could be a time to flex their entrepreneurial muscles. Personally, I love hearing from my dad on this front — he’s dabbled in photography for most of his life (I occasionally remember the makeshift darkroom in our basement) and was most recently proud of taking pictures that made up another retiree’s music album cover.

For those approaching retirement that are looking to spend more time with grandchildren, it may not always play out the way they imagine. While some grandparents are truly a support system in daily activities, others may not have been as physically or emotionally close pre-retirement. While this can be a sensitive topic, relying on “spending time with the grandkids” as a primary focus of newly found free time could lead to disappointment and family rifts. Have you discussed the frequency of visits and/or support with your children? How does this align with how you’re envisioning spending your time?

For those currently dealing with aging parents, it may be helpful to have a trusted third party help coach necessary conversations. Similarly, the further you are from needing care, the easier it may be to have objective conversations about how to design a pathway from self-sufficiency to connected care.

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Reflecting on challenges you may be having with parents transitioning to care, how do you wish they had made decisions? Would an earlier move out of their homes or considering aging communities have helped them find new connections with peers and have better access to care? Would you consider making a written plan for yourself now — always subject to change, but allowing for easier decisions for yourself later?

These conversations can help bring clarity to what it means to retire. This may lead to a more specific picture of the financial needs, while engaging in creative thinking and bringing focus to what may have been only a blurry image until now.