Don't Forget to Create a Life Plan for Retirement

A financial plan is paramount to reaching and exceeding your financial goals. Having a life plan for what you will do with all your free time once you've retired is an important factor when designing and developing your financial plan. It is frequently overlooked by financial professionals.

As people approach their retirement date, this conversation becomes more important. Everyone has different ideas about what their ideal retirement is going to look like. In some cases, retirement may mean never working another day in their life, while others may look at retirement as the day they wake up in the morning and know they do not “have” to go to work, but may continue anyway. Some may simply slow down and maintain a part-time job.

Creating a Life Plan for Retirement

The fact is that most people are preparing themselves financially for retirement, but not thinking about the emotional and life fulfillment aspects. If you spend upwards of 40 years working, and raising a family, you may not have time to develop hobbies and outside interests that can keep you busy during retirement. (For more, see: Retirement and Depression: 6 Ways to Overcome It.)

In most cases, people do not view their ideal retirement as not going to work and instead sitting home all day watching television and old movies. Most people seek something more meaningful than that. It is for this reason that you must begin to think about a life plan as part of your financial plan. 

You may decide that golf, fishing, traveling, watching your grandchildren, consulting or having part-time employment may be your life plan. These are all great things. It is important that you know what your plan is and refine it as time goes on. Thinking about your life in retirement includes thinking about how you would ideally like to be spending your time and what you will need financially to support that.

Prepare in Advance

Consider what you can do today to help you get there. This may mean adjusting your priorities to begin getting involved in some of those activities you plan on taking part in now so you have the knowledge, the ability, and the social circles to support your involvement. You will also need to make sure that you are in the right financial circumstance to support it as well.

If you plan on retiring and travelling around the world sailing for a few years, you need to make sure that you have the skills and the desire to embark on that type of trip. In addition, you need to make sure that you have the financial wherewithal to support it.

Those that have their life plan and retirement plan in place are the most successful at having an enjoyable retirement. People who have addressed a retirement plan from a financial aspect, which is a minority, typically have not explored their life plan, and this is a recipe for disaster.

Imagine retiring and having the financial ability to sustain yourself for the rest of your life, but you have no idea what you are going to do with that time. This is a major contributor to why we are seeing people working longer and later in life.

Although some of these individuals have no other choice than to work, many continue to do so because they failed to design their life plan for after work. Not having a life plan for retirement has caused them to continue working so they can still be a productive member of society, and not someone that is sitting home doing nothing. (For more from this author, see: When You Start Saving for Retirement Matters.)

Disclosure: This article represents the opinion of Mitlin Financial Inc. It should not be construed as providing investment, legal and/or tax advice.