Just like that, you’ve made it. You know why you need a balance. You stand at the brink of retirement, however you have defined that, and you’re about to step across the threshold into the next phase of your life. What on earth do you do now?! Now, you need to ask some questions about making that leap into retirement.
This is a Big Deal
Whether or not your retirement is a cliff-edge where one day you’re working full-time and the next you’re not, there is a point at which you begin the process, at least, of retiring. And I think it’s vital not to underestimate the significance of that step.
I’ve walked with countless clients over the years as they make the leap, and I’ve seen the complex emotions in them as they transition to the next phase of their lives. I’m sure that a large part of this is because in no small measure, we define our place in society based on what we DO. If we’re no longer doing that thing, or if we’re starting to do less of it, then that might impact our thinking.
Also, there can be a sense, however erroneous it is, that being retired means that’s it for your valuable contribution to society. Obviously that’s total garbage, but for many people, that sense will be nagging at them a little bit.
As with all things like this, the first step to overcoming these feelings is to acknowledge them; perhaps even to entertain them consciously for a while, folding them over in your mind to see how you’re impacted by them. But if you do this, you must also apply some objectivity to things – clearly you have much still to offer the universe, whatever your circumstances.
Acknowledging that retirement is a big deal means you don’t just pile into it thoughtlessly. Intentionality is a state of mind, not just action. Hopefully, the planning that you have done in the run-up to this step will help you to gain perspective about what the next step holds for you.
Understand That Life Will Change Your Plans
Over the past few blogs, I’ve laid down something of a process to follow to get everything in place for the great transition into retirement. Everything from fully understanding where your financial pots and plans are held and how they’re invested to the mechanisms for drawing down money to the importance of cashflow, particularly in the early years of retirement.
But no matter how well prepared we are for this event, life will invariably throw something at us that we weren’t expecting. I had a conversation once with a client couple where he retired in December. He certainly wasn’t expecting a drop in the value of his pension funds of 15-20% in the wake of the COVID-19 crisis (early March 2020).
Fortunately, I was able to show him that he was well prepared for this and as it happens, they have plenty of cash to allow time for the invested portion of their wealth to recover before they need to touch it. But understandably, they were shaken.
Again, preparation is the key – if we understand that even our best-laid plans are likely to change the second we step over the threshold, then we’re less likely to be thrown for a loop. Nothing stays the same; nothing goes completely to plan. Plan for the unexpected and expect it to show up.
Make Good on Your Promises to Yourself
At the start of our journey of preparing for retirement, we look at refining the vision. Specifically, I asked you to cost out your expected lifestyle so we could plan accordingly, building in lump sum costs for those things you wanted to buy or do that you’ve always promised yourself you’d do when you had the time.
Now’s the time to get those things done. So, make plans – scope out options for the camper van or boat you wanted to buy; book the big holiday and make the gifts you want to make. Do all of those things, because it’s really important that you reward yourself and implement some of the things you’ve been dreaming about doing.
OK, review time!
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