Retirement has long been touted as the light at the end of the tunnel, at least from the day-to-day grind. But while some are excited about the prospect of living a life of travel and leisure, many lack a plan to use the rest of their free time meaningfully.
Increasingly, Canadians are discovering that once they retire, unlimited free time can be too much of a good thing, causing some to even crave going back to work. According to Statistics Canada, more than 55% of Canadians planning to retire would prefer to keep working if they could keep part-time hours, while 43% would continue on if their job were less stressful.
Susan Latremoille, Co-founder of Next Chapter Lifestyle Advisors, isn’t surprised by these numbers. “I noticed many of those looking forward to retirement with great anticipation would then not be as happy as they thought they would be,” she explains. “We should replace the word retirement with ‘rewirement.’
Marianne Oehser, a retirement and relationship coach and fellow Co-founder of Next Chapter Lifestyle Advisors, shares that sentiment, noting that many assume their retirement will unfold naturally, to their detriment. “When the initial euphoria of freedom and lack of stress wears off, they face the reality of life with 40 to 60 more hours of free time to fill each week,” she explains.
So many people spend their adult lives preparing financially for their post-working years, but they don’t take the time to prepare for the other aspects of retirement. Next Chapter Lifestyle Advisors aims to help Canadians address their non-financial retirement planning needs, which include living well, giving back and leaving a legacy – all aspects of what it means to live what the company calls, “The RichLife.” Latremoille believes these are the foundation of finding happiness and purpose in life after work.
Understanding your values and goals
When trying to envision your retirement, self-reflection is a critical part of the process, says Latremoille. Understanding your values, whether they include volunteering for a particular cause, staying fit, spending time with family and friends, or returning to a hobby you didn’t have time for, will help you chart a path through your daily life.
She recalls one client who was a musician in his teens and early twenties but had given up music when work became too busy. “When he retired, he went back to that passion he had 30 or 40 years ago and rekindled it. He’s now composing and performing, and music has become a big part of his life,” she adds.
Still, not everyone has a hobby to fall back on full time. Latremoille finds executives and professionals often want to remain active in some way by serving on boards, mentoring or using their expertise to help a volunteer organization. It’s understandable, she says, noting that work provides a social connection and represents a big part of our identity. Just as you are always learning during your career it’s important to keep your mind active and keep learning new things.
Even if you have a vision of what your retirement looks like, consider test-driving your plan by taking a sabbatical or working part time. This approach serves as an off-ramp to help ease people into the rigours of this new phase of their lives, explains Latremoille. Slowly moving into retirement can give you a safety net and help you build confidence to know when it’s time to move on, she says.
A different kind of portfolio
Oehser developed a framework called The Happiness Portfolio® to help clients find fulfillment and personal success in retirement. She and Latremoille liken it to an investment portfolio, which requires a degree of balance and diversification.
The Happiness Portfolio consists of eight areas:
- Professional – many people want to continue working in some way, sometimes in a new career.
- Primary relationship – usually a spouse, but whoever is closest to you.
- Family and friends – spending more time together.
- Giving back – volunteering for a cause or mentoring young people in your line of work.
- Spiritual and emotional well-being – could include meditation, yoga or religion.
- Leisure – often hobbies or travel, but can include reading and catching up on movies.
- Self-development – continuing to learn new things is critical as you age.
- Health and aging – this may include fitness and healthier eating, or keeping on top of existing health concerns.
Both Latremoille and Oehser believe that when you enter retirement, you should consider these eight areas consciously and then develop a plan that incorporates all of them to some extent to continue living “The RichLife.”
Acknowledging the financial element
Ideally, your financial advisor is already aware of your values and goals and incorporating them into your retirement plan, but that may not always be the case. If you haven’t already done so, speak with your advisor about the finer details of your ideal post-retirement life so that your financial plan isn’t made up of just the bucket list items, but also the non-financial aspects.
Beyond that, however, it’s important to acknowledge that money can be an ongoing source of stress throughout retirement, no matter how well-prepared you are. For many high-net-worth Canadians, even business owners who have sold their companies to retire, it can be an enormous adjustment to live on a finite source of income.
“You’re used to having cash flow, and you feel freer to spend your money because more is coming in,” Latremoille explains. “The minute it’s finite, even if it might be millions on paper and more than enough to leave a big estate, people worry. A psychological thing taps in, and then people start to change their spending or giving habits for fear that they could run out of money.”
Similarly, finances can be a source of marital strife during retirement if you haven’t adequately communicated what you want and expect of each other. Sometimes, spouses are on entirely different planets when it comes to how money should be spent and invested during retirement. Oehser suggests couples sit together, write down their assumptions about finances and other elements of their retirement, and then talk about what they’ve each written down.
Ultimately, retirement can be everything you hoped for and more, with a little forethought and planning. And if you’re already retired and hitting the end of that honeymoon phase, it’s not too late to shift your mindset, notes Latremoille.
“It’s the idea of living ‘The RichLife,’” she says. “‘The RichLife’ doesn’t mean the guy with the most money; it means having a life that involves really three aspects: living well, giving back and leaving a legacy.”
For more information, speak with your BMO financial professional about your wealth plan to ensure it reflects your current financial and non-financial goals.
