Your Retirement Plan May Be Missing One Crucial Ingredient
When preparing for retirement, financial planning is typically top of mind — and for good reason. People are living longer than ever, health care costs are rising and pensions have gone by the wayside for many people. As a result, it’s important to save money for the retirement you want, as well as the unexpected.
But many retirees miss one crucial ingredient when retirement planning: prioritizing their mental and emotional health.
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The flaw in traditional retirement planning
An AARP study found that more than half (57%) of retirees never give thought to planning for their emotional health in retirement. The study also found that almost half of retirees hadn’t planned for how to achieve fulfillment in their retired life.
Retirees may feel a loss of structure or even purpose when they stop working at a traditional job. They can also see their social circles shrink, since retiring also means saying farewell to your co-workers. While it’s necessary for retirement plans to focus on cash flow and ensuring that your nest egg is large enough to cover your living expenses, this granular focus can backfire if you don’t address what you will do with all of your extra time.
Keep in mind that not planning for your health in retirement — whether it be emotional, mental or physical — can also result in a financial impact. You may face health care costs down the road that you wouldn’t have had to face in you focused on your health. In other words, you can save money in the long run and help preserve your nest egg by planning on how to live a healthy life in retirement.
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How to plan for the non-financial aspects of retirement
In between crunching the numbers to make sure your finances work in retirement, take some time to think about how you will spend your new free time. Consider your purpose beyond going to work. Of course, this will be different for everyone. Some retirees will spend extra time with grandkids while others will volunteer for a charitable cause.
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It’s also important to plan how you will maintain, and maybe even grow, your social circle. If you decide to volunteer, that’s one way to meet people. Joining social clubs and activities, like a book club, can also help you build your network. A calendar filled with non-work activities with friends and families gives you things to look forward to each week and lets you plan ahead.
You don’t have to bring your full plan to fruition on your first day of retirement. Start by establishing one to three non-financial goals with timelines for once you receive your last paycheck. Then, you can slowly start to build your schedule and social network out as you continue into your golden years.