Having a financial plan to prepare you for your retirement years is one thing, but what about the emotional transition to that “second career”?
For years you stuck to the plan and invested wisely and now you want to enjoy the fruits of that hard work. You might want to travel or volunteer. Or, maybe you're looking forward to spending quality time with children or grandchildren.
The emotional leap to this new life stage can be challenging. Like financial planning, emotionally planning for your post-career years needs to begin long before retirement starts.
"You need to start preparing emotionally right away,” says Tania Stephenson, Investment Specialist, Servus Credit Union and Credential Asset Management Inc.. “For many people, their work becomes their life, especially for those who are self-employed. We all need to figure out what our purpose is and know that when you retire from a career you still need something to get you up in the morning.”
An investment specialist, like Tania, focuses on starting retirement plans early to give the members she works with peace of mind in knowing money will be there for the retirement they want.
Your financial plan needs to be a “living thing,” Tania says. It needs to change with you as you navigate through life. She says she meets with her members at least once a year to update their financial plan. The emotional aspect of retirement planning runs in parallel.
Looking at retirement differently
Different generations require different approaches. Baby boomers (those born between 1946 and 1964) are still focused on the word “retirement” and the traditional meaning of that word, whereas Generation Xers (those born between 1965 and 1980) or millennials (those born between 1981 and 1996) look at their post-career years differently, Tania says. Younger generations prefer to think in terms of “financial freedom”, rather than “retirement” when talking about their aspirations for their later years. She says 70 per cent of her members are boomers, with the rest being Generation Xers and millennials.
“Sixty-five used to be this magic number,” she says. “But now [members] are saying, ‘I could live until I am 90. What am I doing for 25 years?" On the other hand, Tania says, "I have some members who tell me they will work forever. They can’t fathom the thought of not working.”
Preparing members for the emotional transition into retirement or that second career is a big part of her job, according to Tania.
Handling worry and having a vision
As her members approach retirement, Tania says, most express concern. They have been focused on accumulating savings for their future. When the future becomes the present, part of the emotion comes down to a fear that they won’t have enough money. Some are unsure how they will spend their time.
To help emotionally guide her members through this process, Tania first builds a relationship with them and learns what is important to them, asking them about their hobbies and passions and family life. She asks about their job and whether they really enjoy it, or whether it is something they have to do. If it’s the latter, she asks them if they had the freedom to make a choice, what would really want to do?
She uses a tool called a Financial Vision document to help members emotionally prepare for retirement. After asking questions about their lifestyle and plans for the future, she writes a story for them and attaches pictures to it. The end result becomes a vision document they can look at to imagine what their post-career life will look like. They can better picture it. The Financial Vision document is especially helpful for those who feel more unsure about their future.
Finding your post-career purpose
Once your financial foundation for retirement is set, the priority is personal happiness and emotional fulfillment. Some of the suggestions Tania gives are to take some years off, travel, buy that sports car or otherwise reward yourself and check off some of your bucket list items. One couple took Tania’s advice and travelled extensively for five years after retiring. The woman still tells Tania how glad she is that they travelled when they did, because soon after she became ill and couldn’t walk for a long period of time.
In some situations, Tania has advised her members to consider a part-time job to earn some pocket money and set a work-life balance. That’s another way of bridging the first career to the second: learning to walk before you run.
For others, any talk of a second career just doesn’t pique their interest at all. They might have worked a long career and multiple jobs and now just want time to spend with family, or help their children care for the next generation.
“My mom does that for me, actually,” says Tania, whose children are aged eight and five.
Her father, on the other hand, had a different retirement purpose in mind. His work, which had him up every day at 4am for 40 years, was a huge part of his life. He became self-employed after retiring from his full-time career.
“I don’t know what he would do if he didn’t [work]”, Tania says.
“Having a purpose is very important,” Tania says. “And everyone’s purpose is different.”
Mutual funds and other related financial planning are offered through Credential Asset Management Inc.