Sep 6, 2024
So you’ve pulled it off: a decades-long, successful career and some solid funds in your retirement account. Soon, the world will be your huge honking oyster and you can do anything you want with your life. Goodbye, deadline stress. And free time? Hey, it’s retirement: Free time is all the time.
Yet much of the time these days, a part of you is freaking out.
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That’s the case for Frank, 66, who plans to retire when he hits 67. Though everyone’s retirement needs differ, he’s run his $1.4 million through Vanguard’s retirement calculator. Based on his salary of $75,000 and needing 75% of that annually to retire comfortably, his withdrawals will outpace his expenses — and that’s before he factors in other income sources.
But what will he do, Frank wonders, without the modest office he slaved years to get? His shortstop spot on the company’s softball team? The break room gossip? His key role in growing the business? Frank fears lacking purpose in his days, a common problem among those transitioning into retirement. But it’s also one you can turn into a positive.
Delayed retirement by the numbers
Financially speaking, some people don’t retire because they have no choice, Last year, a Gallup poll of more than 1,000 adults revealed that non-retired Americans’ expectations for a comfortable retirement are the most pessimistic since 2012. They’ve fallen 10 percentage points since 2021, including five points between 2022 and 2023.
In fact, the number of seniors working past retirement age continues to climb. As of 2023, 10.9 million people aged 65 and older were still in the workforce, according to the U.S. Bureau of Labor Statistics. Today, 19% of adults in that age group are employed, compared to 11% in 1987, the Pew Research Center reports.
But what if you’re Frank and considering retirement from retirement, so to speak, because of the looming prospect of boredom and isolation? The good news is that in terms of purpose, retirement offers one advantage that’s easy to overlook: the opportunity to swap out your compass.
Whereas purpose in employment is largely determined by your company — which in many cases will value task completion and growing the business — purpose in your golden years is entirely self-determined. It can easily shift to people, causes or community.
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Three paths to purpose
Frank’s trouble centers on a looming lack of structure. Bosses, no matter how much we grumble about them, hand us scripts to follow for our work day and even phases of our careers. Retirement, by contrast, demands a level of proactivity that isn’t always easy to embrace, particularly when workplace comrades and cues are absent. What to do?
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Frank needs to “rewire to retire,” as some call it, to succeed in his next act. His decision to collect Social Security starting at 67 — just in time for full retirement age — will also put another $2,270 in his pocket monthly, a figure he arrived at by entering his salary and birth date into the federal government’s SSA calculator.
Thanks to his smart money management, Frank can ease his passage into retirement in three ways, and so can you:
Indulge your passions. Even the most fulfilling jobs have a way of smothering the pursuits that once lit up our lives. Recovering or discovering a passion is a foolproof path to avoid rumination over what’s lost. As financial planner Andrew Rosen writes in Forbes, “You’ll know it’s a good fit when you feel fulfilled [while] engaged in that activity, and when you develop a new routine around your new passion.”
Build a rich home life. A recent piece in the Harvard Business Review highlighted this as a key to enjoying all retirement has to offer. Especially if you have lingering regrets about long hours in the office or traveling on business, you can make up for lost time by doubling down as an involved parent and/or spouse. This also goes for reconnecting with friends who perhaps you’ve lost touch with or couldn’t spend as much time with as you’d have liked.
Pass on your skills. Whether you volunteer with an industry group or mentor younger hopefuls in your former profession, teaching others what you’ve learned offers a powerful way to stay active and foster connection. Numerous studies point to mentoring’s mutual benefits, including one by Moving Ahead. The social impact organization found that 87% of mentors and mentees "feel empowered by their mentoring relationships and have developed greater confidence." That could well include greater confidence during retirement, too.
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Lou Carlozo is a freelance contributor to Moneywise.
