Test-drive your retirement

This content is categorized as:

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

There are several ways to do this, experts say. One expert, George H. Schofield, Ph.D., author, developmental psychologist and founder of the Clarity Group LLC, in Sarasota, Florida, has helped many clients kick the tires before committing to the next big chapter in life.

“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 in an interview with Athene. “That was enough time off to give their retirement a test-drive.”

What’s the road to your best life?
During that period, the couple reduced their discretionary expenses as much as possible to align with their potential retirement income. They spent their vacation weeks simulating how they imagine spending time — 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 while the practice run confirmed their comfort in their financial plan, some timing and lifestyle epiphanies surprised them.

“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.”

Another couple Schofield worked with shared a four-week, stay-at-home vacation for their retirement test-drive. They took 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 explained. Instead of realizing how much more money they needed to save, the couple learned they were quite comfortable living on less. “They renewed their vows, sold the big house and simplified their material responsibilities,” Schofield stated. The couple worked for just two more years each — four less than they had originally planned — and got an early start on their next chapter.

Are you ready to take retirement for a spin?
Use these suggestions to help you start your own test-drive:

  1. Imagine your future. A sound retirement strategy isn’t just dollars and cents. It’s also about finding what fuels your sense of purpose — perhaps spending time with family, helping others or an encore career? Are you ready to climb mountains instead of ladders or do you have the travel bug?
    You may not have to wait until retiring to reach all of your dreams. Some may be best enjoyed sooner than later, such as traveling to destinations with extreme weather or terrain that could be too demanding when you’re older. If hiking Machu Picchu is on your bucket list, for example, consider taking advantage of the health you have now for that expedition and save the Caribbean cruise when it may be easier as you age.
  2. Evaluate lifestyle and income. What does retiring to your best life mean to you — personally and financially? Generally, it’s suggested that 80 percent of pre-retirement income should sustain your lifestyle, but it also depends on how you want to live after you stop working. Weigh your wants, such as traveling, spending time with grandkids or volunteering, and your needs, including health care costs, food and housing costs.

    Now, factor in potential income sources such as Social Security, annuities and personal savings. Your home may be your largest asset next to your retirement nest egg. Will you sell it and downsize? With an idea of your potential income and the lifestyle that fuels you, your financial professional can help you map out a plan so you can retire your way.
  3. Take a test-drive. Try living for a full month how you want to in retirement, within your anticipated budget. You’ll get a glimpse of what life could be like, what it’s like to be in control of your time or if your spending changes. And it may take less than a month to get a sense of where you stand. Take a cue from the second couple and make a list of what you learned each day. Ask yourself questions, such as:
    • Am I spending more than anticipated?
    • Do I miss working?
    • How do I most enjoy spending my free time?
    • Does my spouse or partner agree with my conclusions? If not, what needs to change?
  4. Revise your plan. Look at what you learned about yourself, your partner and your retirement dreams during your test-drive. Did you spend more or less for travel, entertainment or home maintenance than expected? Maybe you want to live more simply than you imagined, or you may realize you need more money to retire to your best life.

Retirement isn’t the end of a job. It is the beginning of the best work of your life. With a feel for what it may be like and a solid financial plan, you’ll be ready to make the next stage the best stage.

What do you want more of in retirement?
Take this quiz to help discover your personal path to happiness.

Take quiz

This information is brought to you by Athene — where unconventional thinking brings innovative annuity solutions to help make your retirement dreams a reality.