I think we all know of people who retired but then changed their mind. What made them go back to work? What lessons can it teach to those who are now thinking about retirement?
Many clients first come to a financial planner when they start to seriously consider retirement. They have a general idea that they want to retire in two or three years, but are typically nervous about whether they can afford it.
As a recent RBC Ipsos Reid study shows, of those surveyed who went back to work after retiring, it appeared that as many went back to work for non-financial reasons ("I was bored," "I wanted to fulfil a lifelong dream," "I wanted to start a business") as for financial necessity.
It is for this reason that you need to look at both the financial planning and lifestyle/relationship issues - before making the retirement decision.
When we work with a client considering retirement, we focus first on goals for the next life stage. If the clients are a couple, we spend some time trying to determine if their goals for the next stage are significantly different. We have developed a questionnaire that we often use.
Clients occasionally share their answers with us, but often use them to fine tune their own vision. The questionnaire's focus is primarily not financial, but mostly about measuring where your life is today, and what you want your future to look like.
Once your lifestyle vision is sorted out, it is time to shift the focus to the financial planning side. We construct a detailed financial plan that projects the next 30 plus and beyond.
We provide clients with a pretty good sense of what their lifestyle will be like in retirement if they retire today, or at a certain point in the future. The plan also helps to expand on other financial and lifestyle issues, such as how much they can afford to help their children or grandchildren, or how best to support their favourite charities. In many cases, we provide the financial "green light" to retire.
Of course, financial ability only suggests you can retire. It doesn't suggest you should retire. For many of us, our jobs are an important part of our identities and how we feel about ourselves. It can be very difficult to give that up "cold turkey."
Another issue is how to fill all of your free time. Without a plan that reflects your retirement vision, hobbies and goals, the free time can lead to depression. Also, retirement can significantly alter the balance and routine that currently exists with your spouse or partner - sometimes in a bad way.
The retirement coaching industry is springing up to help with this. Eileen Chadnick, a certified coach and principal at Big Cheese Coaching in Toronto, offers advice to boomers trying to figure out what's next. "Welcome to retirement 2.0 as boomers redefine the whole notion of retirement," Ms. Chadnick says. "The new so-called 'retiree' will shun retirement on the porch and, instead, find ways to engage, contribute, and that may or may not include work. Boomers want more from their so-called retirement years than past generations but may not have fully reflected on what that means for themselves."
Ms. Chadnick says one of the mistakes people make when planning for retirement is assuming they will be satisfied with a life of full-time leisure. "Seven days of fishing gets stale very fast. The balance paradigm shifts in retirement. The key is to determine what the right balance is for you. There are many underlying questions to consider."
The issue of retirement has become much more complicated than simply aiming for a financial number. Much like other things in life, a successful and happy retirement takes planning - both financial and emotional.
Follow Ted Rechtshaffen on Twitter @TriDelta1.
Ted Rechtshaffen is president and CEO of TriDelta Financial Partners, a firm that provides independent financial planning advice. He has an MBA from the Schulich School of Business and is a certified financial planner. He was vice-president of business strategy at a major Canadian brokerage firm.
Ted Rechtshaffen