Retirement can be viewed as a blessing or a curse depending on how you prepare yourself for this new phase in life.
It is common for people to emphasize the financial side of retirement. They’ll focus on putting money aside in their 401(k)’s. They will start reading all the literature on creating an income in retirement. Some will even start watching Mad Money in the hope of picking up some useful investing tips.
Still others will feel a bit overwhelmed and seek the advice of a professional retirement advisor. The advisor will most likely deliver a nice looking report with all kinds of tables and charts describing the probability of outliving your assets (hopefully this is low), the right time to collect Social Security, how to minimize your lifetime taxes, a pro-forma budget of your expenses in retirement and so on.
All very official and beautifully presented. But as Mike Tyson says “everybody has a plan until they punched in the mouth”. That punch for most people is called life.
Don’t get me wrong — planning your financial life in retirement is absolutely essential but many people have the wrong impression that having the “plan” is enough and all that is required.
The reality is that financial security is an absolutely key component of your Retirement Wealth but there are so many others aspects to your life that need planning and taking care of.
Let’s get down to the 5 life rules:
Rule 1: Decide what you want and what matters to you
Getting clarity on what you want in life and what really matters to you is no easy task. For most of your life, you have defaulted to societal norms.
Study the hard sciences and you will have a high paying job for life. Buy your first house by the time you are 30. Sacrifice your personal life and health for the good of the company by putting in 60+ work weeks and playing office politics. Bear and grin if you have to.
But now that you no longer have a boss or corporate identity, who are you and what do you want out of life? Now that you can at least contemplate life’s finishing line what values do you want to be remembered for? Are you still defaulting to the last 30 years?
Many people will live almost as many years in retirement as they did during their careers. That is a long time to live without a guiding light. Finding your purpose and what really matters to you will serve you well during the good times but especially when you face adversity.
- What is fulfilling and meaningful to you?
- What do you want people to say about you in your obituary?
- What life lessons do you want to pass on to your loved ones?
- Have you thought as to why whatever you see in your future is important to you?
Rule 2: Maintain balance in your life
A fulfilling retirement is not solely driven by how much money you have in the bank. Having enough financial resources to live the way you want is important but the quality of your years in retirement is heavily influenced by how you spend your time and with whom.
Having lots of money to spend but few interests or friends to spend time with will not create a fulfilling retirement. As my mother used to say, the key to everything is a balance.
In this context, balance refers to all elements of your Retirement Wealth — physical and mental health, financial security, social and family connections, work/hobbies, and lifestyle.
You can’t have a fulfilling life unless all aspects of your Retirement Wealth are in sync. There will be areas where you are weaker that will demand your attention. Maybe there is an unresolved family conflict that needs to be taken care off. Maybe you need to start an exercise program and eat better. Maybe you just need to make more time sharing an interest with your spouse or partner.
The key is taking action today. Don’t postpone something in the hopes of finding the right time to get started. Start now, start small and keep moving forward.
- Do you feel good about all areas of your life?
- Are you leading a life of no regrets and peace of mind?
- Are your family and social connections in good shape?
- Are you doing everything in your control to remain physically and mentally active?
Rule 3: Design your environment to support your goals
The environment around you plays a huge role in enabling you to lead the life you want in congruence with your values. Research in the field of psychology has found that our environment is critical in influencing how we behave.
Surround yourself with positive people and it will rub off on you. Surround yourself with people that like to rehash everything and it is highly likely that you will avoid taking much concrete action on anything material.
If you move to a community where the only time that people socialize is at Happy Hour and you value a healthy lifestyle you will likely suffer some internal conflict.
Humans like to fit in. Fighting against your environment makes you stick out like a sore thumb. You either fight your environment or accept it.
You will have to resort to willpower to overcome the pull of your environment. But as research by psychologist Ben Hardy has shown the environment usually wins out. Your willpower is finite and eventually, most people will succumb to the rules of their environment.
The only way to lead the life you want is to design your environment to be congruent with the life you want to lead. The pull of your environment is too strong to overcome by willpower alone.
Your best chance is to create an environment that supports your desired way of living. Start with the obvious — your social network, your physical surroundings and other influences around you.
- Are the people you surround yourself with supportive of your goals and values?
- Are your physical surroundings set up to reinforce the type of behaviors that are required to accomplish your goals?
- Are you feeding your brain useful information conducive to creating a positive environment or are you mindlessly consuming news porn?
“If you do not create and control your environment, your environment creates and controls you”
– Dr. Marshall Goldsmith
Rule 4: Remain flexible and adaptable
Benjamin Franklin once said, “in this world nothing is certain but death and taxes”. I think that it is safe to add a third — change.
Change is happening at an increasing pace in our society.
We see technologies come and go.
We see new companies being formed and reaching mega-cap status within less than a decade such as Airbnb and Uber.
We see new norms of behavior change overnight such as the rise of social media as a substitute for in personal relationships.
The world around us is moving faster and faster. We are every day presented with more choices. More choices can leave us at times confused and bewildered as Barry Schwartz points out in his popular book The Paradox of Choice.
The pace of change will if anything continue accelerating. Hoping to keep up with every single new development and technology is humanly impossible.
What you can do is to remain flexible and adaptable. As Charles Darwin stated, “it’s not the smartest or strongest that survive, but the most adaptable to change”.
We all like to think that success happens in a straight line. In reality, life is a zigzag of ups and downs.
Developing mental flexibility and adapting to the change is a necessary skill for thriving in a world where the pace of change is accelerating.
“When you can’t control what is happening challenge yourself to control the way you respond to what’s happening. That’s where your power is!”
– Twisted Angel
Adopt as author Carol Dweck would say a Growth Mindset where you believe in your own ability to learn under new conditions. Your thoughts and actions are malleable allowing you to adjust to changing circumstances.
- In the past how have you reacted to change in your life — by hoping it would revert back to normal or accepting that things had changed and adapting
- Are you paralyzed by past failures or do you look at them as learning opportunities?
- Do you like taking on new challenges or do you prefer to stick to known situations?
- Do you believe that you will have to work hard to reach your goals, or that your talents are enough?
Rule 5: Take action and don’t waste time
Time flies as the saying goes. One minute you are graduating from high school, the next you are starting your first real job, getting married, having kids and then fast forward to the time when you actually start thinking about retirement and yet another phase in life.
And it all goes faster and faster and you start wondering where time has gone.
You realize, time does not expand, it only shrinks. Every day the only certainty is that you are a day closer to your last one.
No longer can you afford to sit back, moan about what should and could have happened, and endlessly wait for that moment of inspiration or luck to propel you to the life you always dreamt of.
“One thing that can’t be recycled is wasted time. Lost time is never found again”
– Unknown author
All of a sudden you realize that time has become your enemy whereas before you thought of it as a friend.
As Marshall Goldsmith says in his book Triggers, “we are better planners than doers”. Without action, nothing will change and our dreams and goals for our retirement years will remain unfulfilled.
- Are you waiting for an external signal or event that now is the time to take your first step?
- Are you filling your day with mindless activities that don’t get you closer to your retirement dreams and goals?
- Are you reluctant to start a new project or activity because you feel you need a large chunk of time?
- Do you feel like you are always doing research and planning, or are you willing to figure it out as you go?
“The best time to plant a tree was 20 years ago. The next best time is today.”
– Old Chinese Proverb
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If you are looking for additional perspectives to guide you in formulating your next phase of life check out our Retirement Wealth Checklist.
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