Bouncing off the walls is a bad retirement plan - opinion
“Retirement at 65 is ridiculous. When I was 65 I still had pimples.” – George Burns
By AARON KATSMANCalculating taxes(photo credit: INGIMAGE)
I had a long conversation last week with a couple who immigrated to Israel a few years ago after reaching retirement age. We were talking about the “philosophy” of retirement, which I define as how to have a meaningful and productive retirement. The wife told me that she works part-time for a family business that her kids in the US now manage, and while she works, her husband splits his time between volunteering and taking online college classes.In addition to that call, I have had multiple Zoom’s recently which were all about clients in their late 50s and early 60s reviewing their finances to make sure they are on track for a financially secure retirement. Throw in the fact that in our family this is birthday season, and aging has been on my mind. My father, who should be well, is about to turn 91, and my sons are turning 12 and the big 18. Oh, and my dear wife who will soon be celebrating her 29th birthday once again.For many, retirement is the culmination of decades of hard work and a new beginning of a life of leisure. Though as a financial advisor my main job is to help individuals fund their retirement, I have found that more and more the job entails getting them to start planning and thinking about how they want to spend their time when they no longer need to punch a clock. With much longer life expectancy, we no longer work until we drop. You’d better think long and hard before you retire, on how you plan to fill up 24 hours a day, 365 days a year, for what could easily be 20-30 years!Not like on TVA few years ago I wrote, “Earlier this week, my seven-year-old wasn’t feeling well, and it was my turn to stay up with her. At around 3 a.m. there was a show on TV about a retired couple from somewhere in the UK looking to buy a vacation property on some sunny island. They were going on and on about how they just want to relax in the sun for their retirement. My blood pressure started to rise and I told my seven-year-old that I bet they’d go stir-crazy after about two or three months, and that their dream of retiring in the sun will turn out to be somewhat of a nightmare. She looked at me and was clearly wondering why I was getting so upset and talking to myself out loud, because it was clear she had no idea of what I was talking about!”When questioning potential retirees about their future plans, the most common answer I get is “We are going to travel.” That usually means a couple of trips a year (in non-corona times) for maybe two to three weeks at a time. That comes to one or two months. So I then ask what they plan on doing the rest of the time and I am usually met with a “deer in headlights” kind of look.Burnout“The White Coat Investor” Jim Dahle writes about how he recently did a retirement practice run, and spent six weeks straight traveling in the US. He writes, “After six weeks of doing the most fun things I could come up with in our current COVID-impacted world, I was no longer having anywhere near as much fun as I should be having. So, how can someone prepare for finding purpose in retirement?”He continued, “Brigham Young once famously said that a day should be composed of eight hours of work, eight hours of recreation, and eight hours of sleep. This results in a balanced, purposeful life. And when it gets out of balance, one becomes less productive, tired, burned out, unhealthy, and/or unhappy. I think there is a great deal of wisdom to be found in that formula.”For those of you who have worked your whole life and haven’t thought about how to spend your retirement years, look out. Those who never thought about how they will spend their time post-career often tell me they are bouncing off the walls! They were so used to having a set schedule while they were working, now that they have so much free time they just don’t know what to do with themselves.As I have written many times, I think it’s incumbent for those about to retire to speak to other retirees to understand how they made the transition from working to this new chapter in their life. Those who succeed in this transition look at retirement not as the beginning of the end, but rather as a new chapter in their life. This attitudinal approach is crucial in creating an optimism which helps give meaning and purpose to this stage of life.The information contained in this article reflects the opinion of the author and not necessarily the opinion of Portfolio Resources Group, Inc. or its affiliates.The writer is author of Retirement GPS: How to Navigate Your Way to A Secure Financial Future with Global Investing (McGraw-Hill), and is a licensed financial professional in the United States and Israel. Securities are offered through Portfolio Resources Group, Inc. (www.prginc.net). Member FINRA, SIPC, MSRB, FSI. For more information, call (02) 624-0995, visit www.aaronkatsman.com or email aaron@lighthousecapital.co.il
