If you’re like most people, you have a vision of what your retirement will be like.
It’s healthy to visualize the life you want and actively work to achieve it. But problems often arise when we’re so rigid with expectations that we fail to adapt to life’s ongoing changes. This is especially true with retirement plans.
Think back to when you were 18 and thought about how your life would be.Maybe your life today bears some resemblance to the one you envisioned, but chances are you took a few unexpected turns that changed it in meaningful ways. Part of the reason is that you assumed a static life over a 30-year horizon. Similarly, your vision of retirement is likely grounded in beliefs that will need to evolve as life happens.
Those retirement beliefs often appear in four core areas.
The Magic Number
Ask most people how much they need to retire, and they'll have a number. It may vary by person; it may be something they read, or it may be a figure they calculated years ago. To them, it is a concrete number against which they measure progress. It’s the finish line they can see getting closer.
The problem in treating these magic numbers as fixed is that they’re shaped by other variables, such as lifestyle, timeline, inflation, healthcare costs, and lifespan. A figure that made sense at 40 may no longer be viable at 52 because of market shifts or a family health issue. In our article, "How Retirement Income Actually Works," we dive into ways to work toward your retirement goals and identify the amount that will work for your retirement.
Healthcare:The Variable Few Plan For Your Health
It’s often said that health is wasted on the youth, the gist being that younger people take their health for granted. This adage often holds true with retirement. It’s one of the most overlooked aspects of retirement planning. We assume the same good health we’ve enjoyed will continue well into the foreseeable future.
Eventually, that assumption is challenged. Sometimes a parent encounters a serious illness, or a colleague faces challenges, or we’re confronted with a personal health scare. Suddenly, health doesn't feel like such a given. It’s an unpredictable variable that can impact every other facet of retirement, from lifestyle and housing to income.
The Paid-Off Home
Many people cite homeownership when defining the American dream. For most, it's a clear representation of financial security and personal stability. With ownership comes the comfort of knowing one of, if not your biggest, expenses is gone. It also offers the assurance of living in your family home well into the future.
But retirement can complicate matters. A paid-off home still requires maintenance, and a family home may prove too large for empty-nest retirees. It may be in a city that makes less sense in retirement, or as family members move. It also represents untapped capital that could fund other goals.
This doesn’t mean that homeownership is wrong, but it helps to think of it with some flexibility rather than as a fixed endpoint.
Retirement as a Finish Line
Retirement is usually framed as the end of work. And this is often the expectation people have when they envision their retirement. No more work oranswering to others. Unlimited time and freedom. The appeal of that version of retirement is obvious, especially in the middle of a demanding career.
But it’s not the only version, and there are benefits to entertaining alternatives. There are health, lifestyle, and financial advantages to working in your post-retirement years. This time and freedom are a gift, and often that gift is the opportunity to do something fulfilling you couldn’t do during your career.
These Beliefs Are a Natural Starting Point
The beauty and challenge of life is its unpredictability. The assumptions explored here aren't mistakes. They're the starting point in a decades-long journey to retirement. And they're based on the information available at a particular time.
The issue is that life continually introduces new information and ongoing changes. A dynamic view of retirement allows you to flex and adapt to the current state rather than cling to an old vision and a former version of you.
In part two of this blog, we'll look at what that looks like in practice by exploring how to move from a fixed retirement picture to a flexible framework that reflects where you are and where you want to go.
If you like to discuss your vision for retirement,let’s talk.