A few months ago, I wrote a blog about the financial benefits of “phasing into” retirement. As it turns out, there can be health benefits to doing that as well.
How can that be? Many people plan for and dream of retirement for years thinking that leaving the stress behind will be a boon for their health and emotional wellbeing. Not to mention that some professions are actually physically strenuous and take a physical toll as well. Retirement can be a time to follow your passions and pursue activities that you weren’t able to do during the working years, making this next chapter seem to offer a fulfilling capstone to a lifetime of professional accomplishments.
But there can be a downside to retiring too early or too suddenly that is easy to understand if other factors are considered. That person in the mirror that you see every day before going to work is the same person you will be looking at after retirement. If you have a habit you would like to break, better to try to do that before retirement because after retirement (especially with too much idle time) that habit can be even more difficult to break. Many retirees tend to indulge in unhealthy behaviors. They are too sedentary or eat or drink too much. Without a schedule and structure, they can feel adrift and become depressed. And, perhaps not surprisingly, co-workers form a crucial social network for many of us. Without those connections and the intellectual stimulation that work can provide, retirement can accelerate cognitive decline.
A 2014 study in France of 500,000 retirees found that dementia was significantly less common among those who retired later than those who retired earlier. And, a 2018 study covering the entire U.S. adult population found that men are 2% more likely to die in the month they turn 62 than in the previous month which is significant as this is the earliest age Social Security benefits can be received. These factors along with changes in employer pensions and retiree health insurance coverage along with changes in Social Security rules has led Americans to work longer. Between 1993 and 2018, the percentage of 65-year-old men participating in the workforce increased dramatically from 28% to 46%. For 65-year-old women during this same time period, the participation rate went from 21% to 35%.
Older workers are not just working longer, though. Instead, they are finding new ways to continue their careers and that brings us back to phasing into retirement – the healthy (and happy) way. In my previous blog, I focused on the financial aspects of retirement (whether immediate or phased in) and that is critical. Make sure to put together a “retirement budget” and then live on it for four to six months. Do you feel like you can do everything you would like to do in retirement? If so, great. If not, that is not surprising. Many retirees find that their expenses actually go up in retirement or at least stay level although the composition of their budget may change (more travel and eating out and less work-related expenses). If your retirement budget does not feel comfortable, go back to the drawing board and either rework the budget or consider working longer but perhaps at a reduced rate.
And remember, retirement is not only about being financially fit. It is also about being emotionally and physically fit as well. First, make sure to have substantive conversations with your spouse or significant other about how you want to fill your days during retirement. Talk about working part-time (again that phasing in idea), traveling, doing volunteer work, taking classes, starting a new business, spending time with grandchildren, family and friends. Don’t forget about the mundane things as well. Who will do the chores and what are your expectations about doing things together as opposed to independently? There is a wonderful book titled “For Better or Worse…But Not for Lunch: Making Marriage Work in Retirement” that you might want to skim through to assist in these conversations.
Next, block out a calendar with what you think a typical week in retirement might look like. Fill in as many specifics as possible on a day-to-day basis. What time will you wake up? What will your Monday look like as opposed to Tuesday or Wednesday? Finally, before you retire (or begin to phase into retirement), take a two or three-week “staycation” and follow the calendar you set up. Are you bored after just a couple of weeks or does something just need to be tweaked? If necessary, go back to the drawing board. Think of this as your retirement “time budget”. Getting this right is as important as nailing down your retirement financial budget. Having a calendar that is filled with activities you find enjoyable and stimulating will not only provide structure but will also keep you energized, happy and healthy throughout your retirement.
As you sort through your retirement options (immediate or phased in, financial and time budgets), please give your Atlanta Financial team a call. We are always happy to help you sort through options and share insights into what we have seen others do that led to a secure, happy and healthy retirement. Happy planning!