A Good Retirement is not about the Money

Transitioning to retirement is a momentous change in how someone leads their life. As human beings at an older age we do not handle change very well. Barry LaValley is a Canadian psychologist who specialises in helping people through major life transitions. He shared his experience and learnings with our team and clients recently.

Research has shown that retirement can boost the chance of developing clinical depression by 40% and couples over the age of 65 have the highest divorce rate.

A successful transition to retirement requires thinking and planning about what someone wants “retirement” to be and talking about this with family and friends.

"People need to change their definition of retirement." Barry says "retirement is deciding to shift gears. It is a transition, not a destination. I do not like the word retirement – because it is not what you are doing. I prefer to call it the Last One-Third of Your Life. It is the time in life when you have choice".

Whilst it is important to get the financial aspects of your retirement organised, the best retirement planning also considers how you live your life today and how you want to live your life in the future.

Myths & Misconceptions

(a) Retirement can be the longest phase of one’s life - it could represent over one-third. Plan how you want to live and enjoy the last one-third of your life. Live on purpose. You may think you have lots of time – but you need to think about what I need to do now. Barry is 70 and has prostate cancer and shared he may not be around much longer. He thought he would have more time. Do not put things off.

(b) Am I going to be a new person when I retire? Unlikely. Retirement is a continuation of your present life. There is a tendency for people to continue their past actions - retirement does not change them. You should still look at what you can control. Get rid of things – like an oversized house or people – that make you feel bad. You can make things happen.

(c) Retirement = 6 hours of golf a day. Many people think about doing things just to kill time. The three most common “hiding places” for retirees are golf, travel, and gardening. Doing things that you enjoy in small doses is best. If you have leisure 7 days per week for 30 years, where is your break?

(d) People spend more in the first three years of Retirement. This tends to be correct. Spending typically tapers off only to rise again in later years owing to costs of health, mobility, and ageing.

Barry’s goal is to prepare your mind for retirement. If you were asked the question “Are you ready for retirement” and you were not allowed to consider your financial issues at all, what would your answer be? Do you feel you have the right attitudes, personality, and outlook to get the most out of this next phase of your life?

Success in Retirement

Barry discusses his thoughts and research on those that have been successful in retirement.

(a) Optimism V Pessimism

Barry cited a University of Oregon study that suggests people who are optimistic tend to live longer and have more satisfying and longer lasting relationships.

(b) Do you create positive or negative stress in your life?

Stress leads to the creation of various hormones which tend to increase arthritis and decrease immunity which typically could lead to stroke and diabetes. Those who are successful in retirement are better at managing the stress.

Happiness creates dopamine and serotonin; hormones that reduce stress.

Successful retirees do more things to create positives and fewer negatives.

(c) Are you Self-directed or Other directed?

That is, do I believe I have total control over how I look at life. Barry suggests those who are self-directed tend to live longer. Even a couple should have separate interests and meet in the middle. They should not be tied at the hip.

PERMA Formula for Happiness

Barry often refers to a formula by Researcher Dr Martin Seligman. He describes five conditions that will lead to happiness at any age. His P.E.R.M.A . formula describes the values we need to pursue to achieve a happy life during our working lives and in retirement.

Positive Emotions: We know that optimists do better in life than pessimists; and self-starters tend to be more optimistic about life in general. Negative energy undermines your immune system.
Engagement in Life: It is easy to just fill in time. Those who are more likely to go out with friends, undertake activities and remain mentally active tend to have a successful retirement. Having a purpose is important – everybody needs one. What is your purpose?
Relationships: We need other people or non-people (pets etc.) who we can care for, have fun with, and to expand our horizons. Men typically have more ‘work’ relationships that women (though this is changing), so often have a larger gap to fill once they exit the workforce. Some people stop starting new relationships and close the size of their social circle. Focusing on expanding your social circle and building new connections is better. The science shows those with the strongest social connections live longer. Retirement communities can be a positive as you are amongst people with common interests.
Meaningful activities: There is a big difference between fulfilling and time filling activities. Retirement is an ideal time to do work and activities that provide real meaning for you. These could include mentoring and volunteering – activities that make you feel relevant.
Achievement: Accomplishing something does not have to be large. Small achievements are great, such as learning a new language or skill. Self-image has a significant impact on our outlook and mental health.

Here is a link to a good 20min talk by Dr Seligman that is worth listening to - Talk by Dr Seligman.

The Phases of Retirement

Whilst each person will have a unique experience, there are some rough guidelines we can use to describe the phases of retirement:

Fantasy Stage – in those last years of work before retirement, the concept of retirement lifestyle is more fiction than fact (normally 1 to 3 years before the expected retirement date). It is the time to dream about all the things you want to do in this phase of life.
Excitement Stage – in the last year prior to retirement, pre-retirees focus on the retirement date in the same way as we would the start of a holiday.
Stress Stage – Reality sets in. Now that retirement has started, it is common for new retirees in the first year to focus on fears and concerns about this new life.
Honeymoon – from 1 to 3 years after retirement, retirees try to do all the things they had dreamt of in the fantasy stage. This is the perpetual long weekend and a time when retirees tend to spend excessively as they adjust to a new lifestyle.
Routine – at some point, roughly at the 3-year mark, you likely move into a routine phase. This period of life will last until a health challenge gets in the way.
Disenchantment – commonly this will occur between 4 and 6 years after retirement when you realise life is not one permanent vacation. However, it can occur at any time. Most often, the disenchantment phase is marked by recognition of your mortality. This is the stage where depression is common as you are forced to adjust to a new lifestyle because of health issues.
Reorientation – the successful retiree will make an adjustment to his or her new reality. They decide not to let life just play out – they will find a purpose.
Contentment – finally, the last stage is contentment as the retiree has created a new life and is adjusting to it. Some never do and remain stuck in the disenchantment phase.

Family

Many people have challenges with intra -family relationships. Barry says you should try and address them as best you can.

Many children abuse their parents’ time in retirement by playing on their emotions. (Author – my neighbour calls them ‘grandchores’ – see how many older couples have child seats in the back of their car). If you find yourself becoming part of your children’s plans, ensure both spouses agree on what proper balance looks like. Think about what you would be giving up – possibly for many years.

Cognitive Decline

Cognitive decline has doubled as a percentage of the population over the past 20 years. Science is still trying to determine the cause, but people who do not use their brains run a bigger risk of dementia. You can control keeping your brain working.

Whether a couple is separated by cognitive decline or death, you should run a ‘fire drill” to think about your Plan B.

Activities

Barry mentioned various activities to assist with general happiness and wellbeing:

MeetUp Groups all-round the country where one can learn new skills in a group setting.
Flow Activities such as yoga, walking and reading are very important in short bursts. They take you away from time and place. When you are feeling fully engaged in an activity, you normally experience joy. Regularly try to add a new flow activity to your routine.
He referred to the fact many retirees get very busy in retirement, at least in the early stage. He suggested slowing down, enjoying the simple things, and making time to relax.

In terms of a checklist for preparing for a fulfilling retirement, some suggestions include:

Have a written plan. Retire to something, not from something. A couple spending 24/7 together can be tough. Think about what life will look like. Spouses should not have the exact same goals – overlap where appropriate, but they do not need to align. If you think your spouse will ‘learn to love’ something, the reality is they probably will not. (Author – I can assure you my wife will not want to do as many road trips as I will – so I’ll be tagging mates to join me).
Define your purpose and values. You can start with this list of 50 suggested personal values: https://jamesclear.com/core-values. Try and pick you Top 10, then whittle down to your top 5 and finally top 3.
Write down what you love to do and do more of these activities.
Write down the stressors in your life – and remove them.
Develop a positive mindset.
Live a healthy lifestyle.
Live within your means
Have meaningful relationships with others.
Challenge yourself mentally.
Have fun.
Have honest and candid communications with your spouse or partner to help align your retirement reality with your preconceived notion of what it was meant to be.

Note that only one of these suggestions is financial. Barry noted there is no research to show there is a correlation between money and the amount of happiness you enjoy in the last third of your life.

Barry’s book So You Think You Are Ready to Retire? is meant to be a coaching guide that you can use as a catalyst to build your own plan and create your own mindset for retirement. The format is based on two simple questions: