Your life in retirement has the potential to exceed the life of your career. Think about that. That's very different than the generations before us. Having a plan ā both a financial plan and a plan for how you plan to spend the next 30+ years ā has never been more important. People with a plan are, not surprisingly, significantly more satisfied in retirement.
Depending on the person, retirement is a word that can trigger positive or negative emotions. Work as we know it can be complex, and include long days, travel and conflict. It can also feed your soul with opportunities for accomplishment, social interaction, and financial benefit. If you find work to be frustrating and stressful, disconnecting from that experience can be a positive. Conversely, leaving a career can be a negative experience for those who have strong, long-time friendships at work and receive positive reinforcement or notoriety from their role.
The transition to retirement has become even more complicated over the past couple of decades with the replacement of pension plans (which provide steady income for life) by employee-funded deferred compensation plans (which place the risk of market volatility on the retiree). Similarly, the reduction in medical benefits and increased healthcare costs have left many retirees wondering how to manage expenses that exceed the resources provided by public safety nets such as Medicare and Social Security.
These new economic realities, combined with the social and emotional aspects of transitioning from work, can make retirement overwhelming to think about. Transitioning from work is especially challenging for those who have not thoroughly planned for it.
Given our longer lifespans, developing a plan that is unique and motivating is increasingly important. Individuals who reach age 60 have a 50% chance of turning age 90.1 That means, you could be retired for 30+ years! Ā
When we are younger, we are encouraged to spend years training and preparing for work that provides meaning and value, yet little emphasis is put on the need to prepare for a similar length of time in retirement. The lack of planning and forethought can lead to difficulty achieving social and emotional satisfaction in retirement as well as anxiety, depression and physical health challenges. On the other hand, older Americans who are more prepared for retirement, and believe they have purpose in their lives, are less likely to develop Alzheimer's disease, have a stroke or a cardiovascular event. They are also less likely to have chronic conditions and more likely to have above average life spans. Which leads to the question, what contributes to satisfaction in retirement?Ā
Since the beginning of the pandemic, a surge in the number of Baby Boomers announcing their intent to exit the workforce before age 67 has occurred (Baby Boomers are individuals who were born between 1946 and 1964.) The exit of Boomers has been inspired by increased wealth through asset growth in businesses, investments and housing. Many individuals view the current environment as an opportunity to take profits and add to their retirement nest eggs.2
If you find the thought of retirement stressful or need assistance establishing a road map to reach your goals, consider having discussions with others who have successfully made the transition as well as seeking assistance from a trusted advisor.
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Mesirow Wealth Management is a division of Mesirow Financial Investment Management, Inc., an SEC-registered investment advisor. Ā Securities offered through Mesirow Financial, Inc., member FINRA, SIPC. Advisory Fees are described in Mesirow Financial Investment Management Inc.ās Part 2A of the Form ADV. Mesirow refers to Mesirow Financial Holdings, Inc. and its divisions, subsidiaries and affiliates. The Mesirow name and logo are registered service marks of Mesirow Financial Holdings, Inc.
