Retirement Advantage Retirement Principles

Ten Principles for a Successful Retirement

Among the challenges facing those planning for the New Retirement is the desire to increase the quality of one’s life and to realize one’s full potential for creative self-realization. To do this, I propose the creation of an individual New Retirement portfolio – much like an investment portfolio -- into which we can place the following eight key principles that make up the capital investments in a New Retirement portfolio:

1. Retire when you’re Ready: While the state of your health and condition of your finances are key determinants for a successful retirement, one of the most important defining factors is whether or not the timing of your retirement (however you define it) was your own decision, made according to your own timeline. Was your decision to retire made voluntarily, or were you forced to leave your work early, before you were ready to. How much control you have over the decision to leave work is one of the biggest factors in how satisfied you will feel in your retirement. <br><br>

Nowadays, being forced to leave the workplace before you are ready to is all too common and will likely be the norm for most workers in the years to come. In fact, early-retirement is already the norm, with half of the workforce retiring by age 62 in both Canada and the United States. What usually causes early-retirement are health problems and workplace layoffs, downsizing, and closures – all of which are out of the control of the employee affected. In many cases, the effects are not just psychological but financial as well, resulting in reduced benefits because they retired before age 65. As for the financial deficits, chief among these is the lost years of earning potential at the highest point of your salary. Not only do you have less time to save, a practice usually looked forward to for those getting ready to retire, but your pension benefits and Social Security/ Canada pension benefits are all calculated based on your highest salary in the final years of your working life. While retiring early may seem to have its advantages, the longer you wait to retire the greater is your salary and benefits you accrue from it; when you take an early retirement, you typically pay a penalty in reduced benefits, unless, of course, you were offered an attractive severance package or buyout. <br><br>

When it comes to the psychology of retirement, a forced early-retirement, whether for health or for corporate reasons, can leave you emotionally unprepared for the transition. Our work gives us five things: a source of income, time management, self-esteem, status, and a sense of utility or purpose, If you have not planned to replace these five factors before you retire, you will definitely be unprepared for the adjustment without them when you are forced to retire. How will you fill your time with productive activities that will be an adequate substitute for these factors of work? People who are forced to retire from the workplace are often faced with feelings of uunfulfillment, because they may have left before they had completely realized their potential in the job or reached the highest level of accomplishment in their chosen field. Being forced to leave the workplace early can also leave you with feelings of having been discarded or of being expendable – so much for your sense of purpose, utility, and self-esteem. <br><br>

So how can you prepare yourself for a possible forced early-retirement? Make sure you have a plan for your retirement in the first place and make sure it is based on an ideal timeline that you have some certainty of seeing through. If the possibility exists that your health could fail or your workplace undergo some radical change, have a backup plan in place with a variety of timelines. You can use retirement calculators to help you visualize how your finances might fare along any timeline. It may encourage you to begin saving earlier, or to step up your percentage of savings, or pay off your debt earlier. You might also consider having another income source, so that when your primary income is gone, you will have an additional source of money already in place. A home-based business is a good example of a second source of income. Above all, do some serious thinking and planning about what you want to in your retirement–whether it means part-time work or full-time volunteering, or lots of leisure and travel and not much involvement in community or enterprise. And don’t just plan, start exploring your options before you retire so you have some idea of the activity level involved and you can be ready for the transition. Above all, look after your health. The matter how much money you have or what kind of plans to you have envisioned for work, leisure or volunteering, without good health you won’t have much of any kind of retirement to enjoy.

2. Life Purpose: The issue of one’s purpose in life arises at different times in life for different individuals. If you have not confronted the meaning of your life prior to retirement, it will emerge for exploration then. If you have already considered it, life without full-time work can shift your sense of identity: “Who am I if I’m not the Vice-President of?” Will you spend the years of your retirement referring to yourself as a “retired Vice-President of” or have you made provisions to create an identity for yourself outside of the identity created by your work or career?

The principle of Life Purpose implies soul-searching, mindful reflection, and greater awareness on the road to rejuvenation. Carl Jung emphasizes that to self-actualize (or fully develop as people), we must discover and embrace spirituality and a sense of purpose by our 40s. He calls this essential life process: individuation. Often retirees will find themselves questioning their identity, redefining the roles of work and leisure in their lives, or desiring clarity on their life purpose. In general, this period in our life can be both a time of deep questioning and a time of renewal. For those entering or planning for the New Retirement, careful attention to this principle will determine what is the most passionate, meaningful, and successful course for you and your life purpose.

3. Values: A second principle one must consider in planning for retirement is what Values are important to you. During your primary working years, those values may largely have been fulfilled through your work. Similarly, while raising children, family values may have been important then; but how will you ensure that those values are also satisfied in retirement? Will you need to revise your values, or replace old values with new ones? Planning toward that eventuality begins with increasing your awareness about your key core values, regardless of the context in which they are applied. Understanding what your core values are is an essential first step in identifying the component parts of your retirement mission statement. Core values are those things that are naturally incorporated into our lives—they are a part of who we really are. Holding to a value isn't a struggle, because if the value doesn't bring you joy or reinforce a positive emotion, it's not a value. It's probably something someone told you is important, but it doesn't create deep contentment in you particularly.

4. Motivators: Motivators are those things that drive a person, whether in work or in other aspects of life, to make the effort to achieve something. Some people are motivated in work by the paycheque they receive; others are motivated by other satisfactions they receive from their careers. Your motivators must be identified and then incorporated into your retirement consciously. Lifestyle choices made because they are motivating for you will lead to significantly greater satisfaction, in most cases, than planning merely based on what others expect you to do, or what you have arbitrarily chosen to do. This principle involves building a new identity in retirement: “Who am I now? What kind of person do I want to become now? How do I define success now?” This process is an important component of the retirement mission statement and leads to renewal in the New Retirement.

5. Talents: This principle asks the question, “What skills, talents, strengths and abilities do I have that I would enjoy using even if I don’t get paid?” In the New Retirement, if you want or need to work, it is often the decision to rely on your talents that leads to using them in a part-time or contract position. This is the principle where work is redefined, and where one's talents can tale preference over the job as we usually understand it.

In this context, talents are those things an individual does well naturally. You may have latent talents or abilities that you have never used or that you may have abandoned during your primary career years. In the New Retirement, these can now be explored and expressed in the post career or working years. For many people in retirement, work is now more important, but that work now is not necessarily their job or profession. In the New Retirement, hobbies, passions, and talents can be turned into occupations or small businesses. As a case in point, the fastest growing sector of the Canadian economy is women entrepreneurs over 55 pursuing second careers based on their talents and passions.

6. Life Experience: Experiences from both work and other aspects of your life can be leveraged in retirement. If you have extensive experience in some workplace skill or professional expertise, retirement is the time to direct that experience towards helping an organization or a cause about which you feel strongly. In the New Retirement, this can be an application of that experience for an altruistic reason solely.

This is work redefined, its work that you choose to do now more or less on your own terms. The work you choose to do now might have been something that was only a small component of your work or profession before can now be your full-time occupation or avocation. Now, you may choose to do it for some pay or none.

The New Retirement is also a time of mentorship, especially for those in the professions or skill-based workforce. It's a time to share with the younger worker or professional your experience and to give guidance. In many sectors of business and the professions, mentorship is a significant area of growth and leadership for older professionals and workers, who still want to remain connected to the workplace. In the New Retirement, work can be experienced as a passage to a new identity.

7. Freedom of Choice: What are your dreams, plans, and other elements of your retirement lifestyle? Which activities will you focus on most? How have you envisioned your ideal mix? There seems to be a natural urge within us after age 50 to have more freedom, to do what we really want rather than what we have to do. This is a time to establish a new priority, to have greater freedom -- to do what you want and value, and to do it on your own terms, in your own time frame.

People in the New Retirement express their freedom by growing closer to others. The competitive nature of the workplace is behind them and they do not need to choose, nor do they wish to choose a youthful goal of autonomy. Now what is important is being independent while being in a state of interdependence. But this state doesn't just happen, it has to be planned for, anticipated, and strived for.

8. Lifestyle Environment. Here, you define how the activities from the preceding principles will be blended into a retirement lifestyle. Will you live "on the road" traveling, or in the home you have owned for years? Will you sell your home, especially now that you are no longer raising a family, and choose another type of habitation more suitable to your new lifestyle and one that earlier you would never have considered -- an apartment, condo, or townhouse? Will you remain in the same city or move to a smaller community or town? Will you spend more time with your spouse or less? How much time will you spend with your adult children and their children? And will you go to them or will they come and visit you? Perhaps you are grandparenting, as the primary caregiver for a grandchild, or dealing with an aging parent.

It is also a lifestyle that supports your expanding capacity to care: -- caring for those we love, caring for our communities [however we define them], and caring for ourselves. Whichever way you look at it, the New Retirement is about caring. Not just a single focused caring for self, or the more focused caring for a spouse and children. What the new retirement years hold in store for you is the capacity to grow and age in a spirit of "generativity." We become caretakers for an expanding multi-generational family of aging adults and mentors for younger people at work and in the community.

While all this is going on, the great challenge of the New Retirement is balancing the caring for others with mindful caring for ourselves. Active, healthy aging starts by designing a lifestyle infused with a sense of meaning, pleasure, and fun. Once again, this doesn't come easily or necessarily naturally, it has to be planned for. Will your disposable income be higher or lower than during your working years? All of these factors must be consciously combined into a desired retirement lifestyle that works perfectly for you and your unique needs.

9. Personal Finances: As we've seen from the preceding principles, finances alone do not automatically make a good retirement, and yet most of what passes for retirement preparation is financial planning. Our financial picture is certainly important, so much so, that once the seven principles are clarified, the final consideration is bound to be money. Will your financial resources support you through retirement? If not, how will you make up the deficit? And what can you do about it now? The viability of your financial resources will undoubtedly determine what kind of retirement lifestyle you will have. Will your pension or financial plan sustain a traditional, full-time leisure option, or will it entail some other commitment to full-time or part-time employment? This option may be more of a choice made out of necessity than an option chosen to remain actively engaged in the work force. The baby boom generation has not always been known for its thrift, but rather more notorious for its self-indulgence and spending.

In Canada in particular, a socialized economic system has proudly proclaimed a pension system that would guarantee a livable income for everyone over the age of 65. While Canada's pension plan continues to assure its citizens that the plan and its goals are still sustainable, this ongoing guarantee has lulled many into a state of complacency about taking personal responsibility for one's financial viability in the retirement years. In the United States, a similar debate is underway regarding the long-term sustainability of the Social Insurance System in the face of dwindling corporate pension plans and personal savings. As a consequence, many baby boomers in both countries are completely without independent retirement savings or investments, and many others have realized this necessity far too late to make a substantial contribution. As a result, many baby boomers realize that they will have to work well into their sixties and even early seventies to be able to live close to the standard of living they now accept as the norm. But, in order to do so, they will need to do more than just work, they will also need to continue to save and invest, and to learn to manage their dwindling resources during the period of their life when more and more demands will be made on them, particularly in the area of housing and health care.

So, this principle demands that a complete retirement plan consist in equal measure of a retirement lifestyle plan -- the what, when, where, and how of living in your retirement years and a financial plan that outlines how you will support and sustain the personal choices any goals you have made.

10. Attitude to Retirement: Your attitude towards retirement is reflected in your perception of what the next stage in your life will be like and how successful you think you will be in it once you have made the transition. The success of this transition is dependent on the degree of planning you have undertaken to lay a firm foundation to meet all the challenges you may encounter during the transition.

While the word retirement produces a variety of images in the minds of those reaching the end of their working careers, to some that concept speaks of the end of productive life, while to others it's the reward for a long life of work and drudgery. In the New Retirement, the word retirement takes on the new meaning of a life with new opportunities and new beginnings. As a result, the word itself is now under attack, with many lobbying for a new word to replace it in the lexicon. The real problem, however, is not the word itself but the fact that society has not kept pace with a new generation’s unwillingness to accept the end of a working life with the end of it all. To this generation, the very nature and meaning of work and life is changing.

There is, understandably, confusion amongst the ranks of those not accustomed to self-reflection. Rather than accepting retirement as that period of inactivity or activity for activity’s sake, a new generation is asking deeper questions about life purpose, life direction, and the real meaning of retirement and how it can engender a life of deeper involvement. The key factor in realizing a successful retirement is to put an end to the confusion between understanding that this is your time to realize your true self and the realization that you are also older. In a culture obsessed with being young, coming to grips with the fact that you’ve reached a stage in life when you’re considered “old, ” with its connotations of becoming feeble, immobile, demented, and physically unattractive, can engender feelings of inferiority and loss of self-esteem. Your association with any of these notions can cause you to flee from retirement and a lifestyle that can offer so much. In the New Retirement, participants see themselves as undergoing a time of change and growth that requires a new sensitivity and awareness of oneself. Far from taking our model of retirement from an earlier generation or from our parents, whose experiences may not serve us well as an attitudinal foundation for planning your retirement, we need to seek out new models and mentors, asking ourselves what makes retirement so meaningful for some and so debilitating for others.

This retirement “value” is a challenge that new retirees embrace when they see themselves engaged in a life-stage adventure of involvement and enrichment. It’s all about options and which ones you will pick that will lead to personal growth and development. For some, this may mean a second career or a committed involvement in one’s community or in some volunteer driven organization. This is also the opportunity to exercise leadership, redirected from the leadership you exercised in the corporate world to your personal life and your involvement in community or organization.

11. Working in Retirement: According to most researchers, a majority of baby boomers will look for work or a second career in their retirement. Working in retirement is quickly becoming more the norm than the exception. In the U.S., employment among workers over 65 is growing at a rate of 10.5 percent a year, greater by far than the 1.1% growth rate in the labor force overall. And people in retirement go back to work for a variety of reasons, the most important ones being to keep involved in the life of their community and to earn extra income to supplement their retirement finances. As people live longer and remain healthier, the desire to stay involved and earn a supplemental income becomes increasingly important.

If you’ve considered the possibility yourself of working in your retirement, here are some useful guidelines based on others’ experience to think about. Remember that what you are looking for in a retirement job is quite different from what you expected or experienced in your career. Look for work that is different from your career, and if not, then consider becoming a consultant. Look for work that offers a flexible schedule, stability, autonomy and a sense of purpose or where you are helping other people. Consider a position that offers you the opportunity to socialize with other people and which offers some degree of intellectual stimulation. Your choice of salary will depend on your need and the benefits that come with the job may or may not be important to you – both are individual choices.

When you started your career, your pay was a priority, now it is time, because any retirement job will need to be in sync with your lifestyle needs – whether travel or leisure and recreational pursuits. When looking for a job that is not related to your career, consider exploring situations that approximate a lifelong passion or hobby. Consider the fact that your retirement job will give you a place to go every day and something to do, so make sure it’s interesting.

Many of the jobs that provide flexibility and autonomy are part-time or involve self-employment. Such jobs are usually found in the service sector and include everything from health care and retailing to consulting and teaching. This would include jobs in restaurants and fast-food outlets, libraries, schools and colleges, financial services, medical offices and health-care facilities, and most retail outlets. While the pay may be low, such jobs can offer plenty of opportunity for socialization and intellectual stimulation. Some of the jobs available in these areas include administrators, marketers and financial types, and quite often the organization is interested in attracting older workers with flexible work options and benefits.

Major retailers like Home Depot are making a special effort to attract older workers because of their knowledge. Some financial service companies have training programs and other incentives to attract the mature worker, whom they value for their experience and personal connections. Teaching is another area where knowledge and experience are valued by the employer, especially community colleges and private training institutions. One of the most successful routes for retirees is consulting – think of it as an opportunity to leverage the knowledge you’ve obtained in a career. Not only will it keep you involved in your field of expertise, but it can offer you the independence and flexibility you are looking for. Another route is to follow a passion that you subsumed for the sake of your career – now is the time when you can revisit it and devote all of your time to it, especially if it’s in the creative arts.

The best advice of all when looking for a retirement job is to list your priorities – decide what is most important to you. Be realistic about the pay and be aware of stereotyping and age bias in the workplace. When you do apply for a job, have a good up-to-date resume in hand and in an interview stress how you can contribute to the company’s success instead of your long years of experience.