There is a common notion that retirement planning is all about the money. That view is only half of the story. The other half is about planning your retirement activities so that you have a high-quality retirement life.
I’ve been constantly surprised about how retirement is turning out in both of those dimensions – the money and the activities.
The money part of retirement planning focuses on saving and growing the savings so that there will be enough money to live off when you stop working. When retirement arrives, you reconfigure your investments to provide a retirement income.
I too have done that planning, and I’ve counseled my financial planning clients to plan in similar ways. Probably my biggest surprise was the miracle of compound growth. Einstein identified it as one of mankind’s greatest inventions. I knew it in theory, but the experience felt like a miracle. My investments started out on a small scale when I was in my 20’s. I stuck with it and watched my money grow into something quite substantial.
Now I’m taking a retirement income. In just the first 1½ years of retirement, I’ve witnessed considerable fluctuations in the value of my investments, much more than I’d anticipated. When Covid 19 hit, values plummeted, then recovered, and are now at all-time highs. At the same time much of my spending changed. It came to a halt because of travel restrictions and quarantines. I anticipate that there can and will be many unpredictable changes in the future. I continue to plan but will adapt my spending as needed.
There is the famous expression – Man plans, and God laughs. But where would I be now if I hadn’t planned my savings earlier?
The other half of retirement planning is about the quality of activities. It addresses lifestyle and goals.
I had planned a retirement life of speaking, hobbies, and service to others. I retired on January 1, 2020, just a few months before Covid 19 happened. Things didn’t go as planned, so I had to make many adjustments to my retirement activities.
This evolution of my retirement activities has also been surprising to me. My first reaction was to notice all of the activities that I couldn’t do. But if anything, my retirement activities have already evolved into a much better lifestyle than I had anticipated. My planning gave me the start and direction. Without it, I know that I would have floundered. As circumstances changed and opportunities arose, I reevaluated and modified my plans.
In my retirement I have much more control over my activities, time and other resources than I had before. I anticipate further changes in the world and in my own situation. I expect to modify my plans as needed. My goal is to continue to explore, grow and contribute as I age.
What can you do to improve the quality of your retirement activities?