Preparing for retirement is not entirely financial. Your degree of happiness in your "second act" may depend on some factors that don't come with an obvious price tag. Here are some non-monetary factors to consider as you prepare for your retirement.
1.
What will you
do with your time?
Too many
people retire without any idea of what their retirement will look like. They
leave work, and they cannot figure out what to do with themselves, so they grow
restless. It's important to identify what you want your retirement to look like
and what you see yourself doing. Maybe you love your career and can't imagine
not working during your retirement. There's no hard and fast rule to your dream
retirement, so it's important to be honest with yourself. A recent Employee
Benefit Research Institute retirement confidence survey shows that 72% of
workers expect to work for pay in retirement, whereas just 30% of retirees
report that they've actually worked for pay.1
Having a
clear vision for your retirement may help you align your financial goals. It's
important to remember that your vision for retirement may change—like deciding
you don't want to continue working after all.
2.
Where will
you live?
This is
another factor in retirement happiness. If you can surround yourself with
family members and friends whose company you enjoy, in a community where you
can maintain old friendships and meet new people with similar interests or life
experience, that may be a plus. If all this can occur in a walkable community
with good mass transit and senior services, all the better.
3.
How are you
preparing to get around in your eighties and nineties?
The actuaries
at Social Security project that the average life expectancy for men turning 65
is 84.1 years old, and the life expectancy for women turning 65 is 86.6 years.
Some will live longer. Say you find yourself in that group. What kind of car
would you want to drive at 85 or 90? At what age would you cease driving?
Lastly, if you do stop driving, who would you count on to help you go where you
want to go and get out in the world?2
4.
How will you
keep up your home?
At 45, you
can tackle that bathroom remodel or backyard upgrade yourself. At 75, you will
probably outsource projects of that sort, whether or not you stay in your
current home. You may want to move out of a single-family home and into a
townhome or condo for retirement. Regardless of the size of your retirement
residence, you should expect to fund minor or major repairs, and you may need
to find reliable and affordable sources for gardening or landscaping.
These are the non-financial retirement questions that no
pre-retiree should dismiss. Think about them as you prepare and invest for the
future.
1. Employee Benefit Research Institute, 2021
2. Social Security Administration, 2021
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