Just as a successful career requires careful planning, so does a successful retirement — and we’re not just talking about ensuring you don’t run out of money.
Your Complete Guide to a Successful and Secure Retirement by Kevin Grogan and Larry Swedroe, is a hugely valuable resource for anyone planning their life beyond work. Originally published in 2019, the book has been fully revised and updated.
Last time we featured an extract in which the authors explained how money is just one aspect of retirement planning. Others include working out your purpose and your passions, and making sure you stay fit and healthy for as long as possible and continue to develop strong personal relationships.
In this extract, Grogan and Swedroe look at four useful tools to help you put together what they call a retirement life plan.
There are a number of simple, yet useful, tools you can use to develop your plan for a successful retirement. As you consider each one, keep in mind the key elements and your assessment of how you are positioned to transition into retirement for each element.
Recognise that in doing your assessment, you actually completed the first step of the planning process, to determine where you stand now. The second step, which we will address as we review the tools, is to develop your plan for how you want to improve from where you are. The third step is to actually live your plan. And the final step is to review and renew your plan periodically, and when circumstances warrant.
Retirement life planning tool: BUCKET LIST
There is a more uplifting approach to this planning tool than was presented in the 2007 movie, The Bucket List. Think about your bucket list as those things you are excited about looking forward to doing, about planning to do, about actually doing, about relating to others, about reminiscing afterwards, and about deciding whether you’d like to do them again.
Most people think about bucket list items as the big dreams, like travelling to Australia/ New Zealand, writing that novel, or hiking the Appalachian Trail. The big dreams are great and should be included, but the items can be smaller as well. Go to that new neighborhood restaurant; see a live performance of Porgy and Bess; teach your granddaughter to play gin; visit each of the county parks in your area.
Sit down with a pen and paper or at your computer, and without making any judgement about whether you will actually be able to pull them off, just begin writing items on your list. You will find that just creating the list is energising and that once you have it, you will be adding to it as you come across new ideas. When you complete an item, physically check it off. It just feels good to do so. The bucket list can be a good way to get the planning juices flowing, so you may want to consider using this tool first. Remember, no judgement. Just write!
Retirement life planning tool: START/ STOP/ CONTINUE
The next tool is based specifically on the key elements. Create a chart with two columns — label the first “Key Elements,” and list them down the column. Label the second column “Start/Stop/Continue.”
To begin, select one or two of the key elements you assessed as needing a lot of improvement. Eventually, you’ll address each of the key elements — remember, you want your plan to be holistic.
For the first one or two key elements you choose to work on, think about two things:
1) Are there things missing from your life that if you began to do them, they would enhance that key element? These are your potential “Start” items. An example for Well-Being would be, “Start taking a one-mile walk at least five days each week, increasing the length and intensity over time.”
2) Are there things in your life that are getting in the way of enhancing that key element? These are your potential “Stop” items. Another Well-Being example would be, “Stop drinking soda and eating M&Ms.”
Once you’ve brainstormed a list of possible Starts and Stops, select one or two for each key element that you think will make a difference. Keep the others on a separate list — you may choose to get to them later as you renew your plan.
Once you get some practice by working on your first key element or two, move on to the others. You will find that it will not take an inordinate amount of time to get to a doable and meaningful plan. You will also find that a Start or Stop in one key element will also positively affect others.
A final point before moving on to discuss the “Continue” part of the plan — keep your Starts and Stops specific. For example, you may be addressing Wellbeing, because you haven’t spent much time over the past years (or decades) exercising. If you write a Start item that reads, “Get fit,” it is too broad to act upon. Rather, write something actionable like, “Take a daily walk” or “Join the local gym and engage a personal trainer”.
If you have assessed yourself for a key element as, “This key element is already a fulfilling part of my life,” there may not be any Starts or Stops to capture. Instead, there are likely things you are doing in your life that are making that key element go well. Write down the key things you would want to “Continue.” Doing so acknowledges what’s working for you, and if sometime later that key element needs a boost, you may find that you had failed to continue what was working, and you will know what to re-Start. An example would be, “Continue having the immediate family over for dinner every other Sunday.”
Retirement life planning tool: FIND THE MAGIC
One way to think about choosing what you may want in your life’s diverse portfolio of meaningful activities is to “find the magic” using this tool. Envision three overlapping circles. One is labelled “Passions”, another “Strengths” and the third “Needs”. Where the three overlap is a smaller, but powerful, circle labelled “Magic”.
To use this tool, write down answers to the following questions:
1) What are you passionate about? There will likely be more than one.
2) What are your strengths? What are those things you are great at and have experience with? These may have derived from your career or other activities you’ve been involved in.
3) What does your community need?
Said another way, where can you passionately apply your strengths to make a difference in something that matters? Magic!
Retirement life planning tool: IDEAL DAY
This tool helps you create the retirement you want by helping you figure out how to spend your most valuable resource: your time. And in doing so, it helps you address the loss of the structure that your career provided.
As you’ve become accustomed, it’s time to write it down—create a two- column table, labelling the first “Time” and the second “Activity.” In the first column, list times in half-hour increments, starting with when you would like to wake up for your ideal day and ending when you would like to go to sleep.
The Activity column is where you enter how you would prefer to ideally spend those half-hour time slots. You can adjust timing by combining rows in the table. For example, if your ideal day includes a workout from 8:30 to 9:30, combine two half-hour rows to give you that one hour.
The ideal day exercise gives you a benchmark to compare to how you are actually spending your time. Making the comparison can help you strive to move your life toward your ideal.
When to retire
Although retirement timing is sometimes dictated by your organisation, one of the choices you may have as you develop your retirement life plan is deciding when to retire. To do so, ask yourself the following four questions. When the answer to all four is “yes”, it’s time to retire.
1. Do I have enough? This is the question of whether you have a sufficient level of financial security.
2. Have I had enough? Despite having a successful career, it may no longer light your fire.
3. Will I have enough to do? Another way to ask this question is “Do I have a written, holistic retirement life plan that promises to be fulfilling?”
4. Does my spouse/partner or someone else close to me want me home 24/7? This is an assessment of whether you have had sufficient retirement life planning crucial conversations to be aligned to your plan.
There is no right or wrong about if and when to retire. However, developing and living your retirement life plan will increase the odds that, when you do retire, you’ll be prepared to make the rest of your life the best of your life.
To help you answer the four retirement timing questions, we recommend that you also consider the findings from the 2020 study Working Longer Solves (Almost) Everything: The Correlation Between Employment, Social Engagement and Longevity.
The authors, Tim Driver and Amanda Henshon, began by noting: “Working longer provides additional lifetime earnings and the opportunity for incremental saving, augments the size of eventual pension and social security benefits and also reduces the number of years of retirement during which these augmented assets will be consumed. Even without considering any health benefit, deferred retirement results in greater resources amassed to support fewer years of retirement.” This helps address the problems posed by the “four horsemen of the retirement apocalypse”.
Driver and Henshon then noted that continued participation in the workforce provides a means for older adults to remain engaged in their communities. In addition to reaping economic benefits from employment, those remaining in the workforce will be “healthier, less isolated, and happier. Objective social isolation has repeatedly been found to be a risk factor for poor mental and physical health, including higher prevalence of disease and increased risk of mortality.”
In addition, they note: “Work provides opportunities for learning, reasoning, and social engagement, all of which help stave off the adverse effects ageing can have on the brain.” They cited a long-term study in England that “assessed memory in more than 3,000 civil servants over a 30-year period covering the final part of their careers, as well as the early years of their retirement. Results showed that verbal memory, which declines naturally with age, deteriorated 38 percent faster after retirement.” They noted that other research has suggested that cognitive declines nearly double post-retirement.
The authors also noted that research has found that “mortality rates decreased among those who worked past age 65”.
Driver and Henshon went on to note that those who continued to work into their older years had a 25 percent increase in the size of their social networks, while people who retired saw their social networks shrink. Given that social isolation has been identified as a health determinant equal to smoking 15 cigarettes per day, the reduced social networks resulting from retirement are cause for significant concern.
They also noted: “Older adults who have a ‘retirement job’ also often volunteer. It is quite possible then that social interaction can be maintained if older adults choose to volunteer rather than work. Research on the benefits of volunteering by older adults is more extensive and has been going on for longer than for older employees.
Although not conclusive, there is a correlation between volunteering and improved health outcomes, including larger social networks.” Driver and Henshon added: “In addition to the benefits derived from increased social interactions, for many people, life derives some meaning, purpose, affiliation, and structure from the fact that they are working. Maintaining a satisfying career can help older people sustain their sense of worth and contribute to their happiness.”
Driver and Henshon concluded: “There is a strong positive correlation between employment, social engagement, and longevity. Facilitating continued or new employment of older workers not only adds more years to those individuals’ lives, but also adds more ‘life’ to their later years”.
You can learn more about planning for a successful retirement and the tools described here in Alan Spector’s book Your Retirement Quest, and at www.YourRetirementQuest.com.
Your Complete Guide to a Successful and Secure Retirement by Kevin Grogan and TEBI’s Larry Swedroe is published by Harriman House.
If you missed Part 1, you can catch up here.
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Robin is a journalist and campaigner for positive change in global investing. He runs Regis Media, a niche provider of content marketing for financial advice firms with an evidence-based investment philosophy. He also works as a consultant to other disruptive firms in the investing sector.
