Test-drive your retirement


You wouldn’t buy a new car without taking it for a spin first, right? Of course not. Yet many of us jump into retirement—one of life’s biggest financial commitments, if not the biggest—without ever giving it a trial run.

So how do you test it first? There are several ways, experts say. George H. Schofield, Ph.D., author, developmental psychologist, and founder of the Clarity Group LLC, in Sarasota, Fla., has helped many of his clients kick the tires before retirement.

“One couple I worked with, like most people, couldn't afford to simply leave their jobs to practice retirement. They did, however, have three weeks of vacation each,” Schofield said. “That was enough time off to give their retirement a test-drive.” 

The couple reduced their discretionary expenses as much as possible during that period to match what their retirement income would be, and they spent their vacation weeks participating in the kinds of activities they imagined themselves doing during their actual retirement—cleaning the garage, going on day trips, entertaining the neighbors, volunteering at a local museum, and singing with a local choir. Each night they shared their experiences with each other, and their test-drive revealed some personal epiphanies. “In the end the husband found he was ready to retire, but the wife discovered she was not,” Schofield said. “He realized how tired of his work he was and she fell back in love with her job during the time she was away from it.” While the test-drive confirmed the couple was comfortable with the financial plan they had laid out, it brought some surprises in terms of timing and lifestyle. 

Another couple Schofield worked with was able to share a four-week, stay-at-home vacation for their retirement test-drive. They filled their time with day trips, puttered around the house, entertained friends, played golf, worked on their investments and had a great time. “Their discovery was that retirement was an umbrella concept for a simpler life,” Schofield said. Instead of revealing how much more money they needed to save for retirement, their test-drive showed the couple they were quite comfortable living on less. “They renewed their vows, sold the big house, and simplified their material responsibilities,” Schofield said. The couple worked for just two more years each—four less than they had originally planned—and got an early start on their retirement.

Are you ready to give your retirement a test-drive? Consider this advice before taking your new lifestyle for a spin:

  1. Imagine your future. Think about what your ideal retirement looks like—both from a financial and personal perspective—and what will need to change to make it a reality. Generally, you need 70 to 80 percent of your preretirement income to live on in retirement, but that depends on your desired lifestyle. Weigh your “wants” (traveling, spending time with grandkids, doing charity work) and your “needs” (health care costs, food, your mortgage), then talk to your Athene agent or a financial adviser to develop a budget that’s tailored to your desired lifestyle and takes your possible income sources (Social Security, annuities, the sale of your home) into account. 
  2. Do a test-drive. Ideally, you should try living your retirement lifestyle within your anticipated budget for a full month to the best of your ability. But as you learned from the couple above, three weeks may be enough time to get a better sense of where you stand. Take a cue from them and make a list of what you learned each day during your test-drive. Ask yourself questions, such as: Am I spending more than anticipated? Do I miss working? How do I most enjoy spending my free time? Is my spouse or partner in agreement with my conclusions? If not, what must change?
  3. Revise your plan. During your test-drive, you may discover that your travel, entertainment, or home maintenance costs are higher or lower than expected, that you want to live more simply than you had anticipated, or that you really do need more money to live the retirement you want. After your test-drive has revealed these truths, reach out to your Athene agent or financial advisor to revise your retirement plan, taking into account all you learned, so that you can be sure you have the fuel—your retirement income—to finish the trip.
Test-drive your retirement
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