“Too many people enter retirement with no plans beyond having enough money to make it to the end.”
Dave Bernard

There is a difference between retirement planning and financial planning. Over the years “retirement planning” has become synonymous with “financial planning.” In fact, most books on retirement planning actually deal almost exclusively with financial planning. Don’t get me wrong, financial planning is vital, but there is much more to retirement planning than getting your financial house in order.

Financial planning deals with money matters. Retirement planning enhances and expands on the financial plan by incorporating the many other personal, psychological and practical issues that you must anticipate and plan for in order to create a more complete and comprehensive retirement plan.

If you have done a good job of planning your financial future, take the time now to consider the other issues that you must plan for in retirement. If you haven’t as yet developed a solid financial plan, start there and then take the time to complete the other important components of your retirement plan.

Those who wait for retirement to come to them risk the possibility of becoming bored and disenchanted with retirement. You wouldn’t think about starting a long, extended trip without a travel plan. Why would you want to embark on a retirement journey without a plan? The point is that you need to prepare a complete retirement plan. It doesn’t have to be formal or complex. You simply need to review all the relevant issues that will affect you and your spouse in your retirement years and determine how you want to deal with them.

The following message is from Dave Bernard, who shares his insights about retirement planning in his blog, “Retirement – Only the Beginning.”

“The reality of retirement is quite different for many people. No one questions the importance of providing for your financial needs in retirement. We certainly need enough money to live and enjoy ourselves after we leave the workforce. But once you have the money side of things taken care of, there are still other retirement preparations that need to be made. Consider what you will do for the next 20 or 30 years. Assuming you now have the time to do what you want to do, what exactly are you going to do?

“Too many people enter retirement with no plans beyond having enough money to make it to the end. Their main goal has been to reach retirement age, while little or no thought has gone into what happens next. If you don’t plan and prepare for your retired life, you may discover yourself just existing rather than truly living. Instead of waking each morning excited about what the day may hold, you could find yourself bored, alone, confused, and unsure.

“Retirement can be a time to pursue passions that have excited us throughout our lives, but it does not automatically happen. We need to put effort into our retirement happiness. Beyond the financials, we must also generate ideas and an action plan for a fulfilling and stimulating retired life.”

Asking the key questions                     

Bernard makes a very good point. There is more to retirement planning than having enough money to retire, but what are some of the things that you need to plan for in retirement besides the money matters?

When I retired the first time, I thought I had a good retirement plan because my total focus was on the financial planning aspects. I enjoyed the freedom that retirement provided and the lack of pressure from work and the opportunity to play golf several times a week. But a few months later I was developing a bit of a depression because I missed the sights and sounds of the business arena. I missed my clients and colleagues and, importantly, the satisfaction I got from helping clients solve significant business problems. In short, I was in a funk.

My first step was to surround myself with books about retirement planning. I figured that other retirees before me had experienced similar feelings and I could find the solution in the books. Wrong. I quickly learned that all the books I read on retirement planning were actually about financial planning.

I stopped and thought about the process and decided I would take on the problem as if it was simply another consulting assignment. In effect, I took myself on as a client. I started by asking key questions about why I was feeling depressed and uneasy about the future. After a great deal of soul searching, I identified 10 items that were missing from my retirement plan. I would like to share what I learned with you in the hope that it will save you a whole lot of time and grief.

Please note that if you are married, keep in mind that retirement planning must be a mutual process. Both partners must share their thinking and preferences. If single or widowed, you still must make the commitment to plan and share your thoughts with your extended family or closest friends.

Wants and needs. Identify and distinguish between what you want to do and what you need to do in retirement. Wants deal with desires and dreams. Needs deal with things that must be done and won’t go away in retirement. You might want to tour Europe, but if you need to care for an aging parent, there is a difference.

Obligations and commitments. All retirees arrive at the gate to retirement with a great deal of personal baggage that you and your spouse have accumulated during your careers and family life. You must identify and prioritize the commitments that must become a part of your retirement plan.

Personal inventory. You have to decide what you do with your time and talent. You need to take a personal inventory of your skills to identify what you are really good at because this is the key to learning what you will enjoy doing.

Life after retirement. You need to plan for how to cope with the sudden change from the workaday world to the retirement world and the impact it will have on your psychological well-being. You must find substitutes for the sense of well-being you received from your job and career.

Goals in life. You must validate or revalidate your goals in life. Look back on your original goals and ambitions. If you are truly satisfied with what you’ve accomplished, then you might want to create new goals for the balance of your life. If you have fallen short, you might want to use your retirement years to fulfill your original ambitions.

Your body. You need to make a realistic and honest assessment of your physical condition. You only have one body—an aging body at that—and you need to devote more of your time in retirement to keeping it healthy to offset the impact of aging.

Your brain. You need to exercise your brain as you simultaneously exercise your body. A healthy mind and body go hand-in-hand to allow you to enjoy additional years in retirement. Identify the things you will do to keep your brain active and healthy.

Lifestyle, location and leisure. One of the really important issues you need to determine is your desired lifestyle. Retirement provides the opportunity to determine exactly how you want to live your life and where you want to live.

Exit strategy. You can’t avoid reality. You will die, hopefully not any time soon, so you must determine what you must do before you die in order to make the transition much easier on your spouse and family—and that includes all the ticklish legal, medical, family and personal issues.

Financial plan integration. The last issue deals with integrating your financial plan into your overall retirement plan. Hopefully you developed a financial plan early in your career to provide you and your spouse with adequate resources in retirement. If you didn’t, then you need to stop what you are doing and seek a financial advisor who can help you determine what you need to do to protect your future security.

Note that financial planning integration is the last step. This is intentional because you must first determine what you want and need to do in retirement before you determine how large a financial nest egg you will need to fulfill your personal retirement goals.

If you have addressed all 10 of these issues—congratulations. Just continue to enjoy retirement. If not, it is never too late to start.