THE NEW RETIREMENT - WELCOME TO THE GREY ZONE
Retirement is changing from a predictable end to working life into a stage where staying active, purposeful and engaged matter as much as having enough money.
Retirement as we know it is changing fast. Many retirees and those approaching retirement are still trapped in the “old school” of retirement, where you worked, you stopped, and then retirement followed a predictable script.
The old script of doing nothing in retirement because you worked hard your whole life has changed. The consequences of doing nothing were ignored, and only recently has research proven the dire consequences of retiring your mind and body.
Ask yourself: Do you want merely to ‘retire’ from work and life, or to flourish during your golden years?
Many retirees already feel trapped on the retirement treadmill. They wake up, take their first dose of pills, have their morning cup of coffee or tea, and start wondering how the day will unfold.
It is not uncommon for many to spend their days inactive in front of the television, doing nothing meaningful for the rest of the day before taking their nighttime dose of pills and retiring to bed for an unrestful sleep. Sleep is often interrupted by aches and pains, worries, or both.
Our discussions with retirees and those approaching retirement generally start with money matters. Do I have enough money to retire? Will we be able to afford to travel overseas? Can I help my children financially? Am I getting sufficient returns to ensure that we don’t run out of money? Will there be enough left for inheritance? These are all relevant and important questions. However, these questions and concerns are only a small part of a successful retirement.
Successful retirement is not about accumulating as much wealth as possible. It is about optimising what you have to give you the most meaningful life in retirement.
What does retirement mean to you?
Preparation for retirement shouldn’t start the day you receive your last paycheque from your employer. Retirement planning, and more importantly, psychological preparation for retirement, should start long before retirement.
Questions like: How am I going to cross items off my bucket list? What am I retiring to? How can I influence people and make a difference in their lives when I am retired? How am I going to keep my body, mind and soul fit and ready for what retirement throws at me? Am I going to pursue my hobbies and turn them into something more meaningful, or am I going to start a new “in retirement” career?
How will I react, and what can I put in place to ensure my and my family’s well-being when I can no longer make decisions due to physical or mental impairment? Do I have an efficient team in place to guide my family when this happens or when I pass away?
Answering these questions will help you move towards a meaningful retirement. Start acting on them five to 10 years before retirement. Retirement is not an end game; it’s the start of a new journey. Welcome to the Grey Zone
Researchers refer to the period between full-time employment and complete retirement as the “Grey Zone”. This is the time when you can start planning the things you enjoy doing. If you loved your full-time job, try to identify how you can still do it, either on a consultancy basis or on a reduced-time basis.
Is it possible to start a small-scale business doing what you love? Can you turn a hobby into a paying hobby? Can you teach others what you learnt over the years? The Grey Zone is not intended to provide space to generate income. If it does, great! The Grey Zone is intended to help you:
Retain your identity
Involve yourself in meaningful work
Maintain social connection
Keep your mind and body occupied and functional
The Grey Zone offers an opportunity to stay engaged without the pressure of an official job with fixed hours. You determine the pace, and you determine the hours. It is your time.
How can one effectively engage in the Grey Zone?
In retirement
If you have not engaged in activities that give you a sense of connection and make you feel worthy, take time out and make a list of all the things you love.
Social connection is one of the most important psychological activities that lead to a fulfilled life. When you retire, you leave behind a circle of friends whom you will probably see less of until the connection is completely broken. Find a way to connect socially with like-minded people.
Don’t let your skills go to waste. If possible, offer your skills in any way you can, even at a reduced fee or at no cost. In all likelihood, someone will be prepared to pay you for your expertise. Write a training manual or a training course. Online courses have become an industry where many contribute.
Providing a service that others appreciate and that can improve their lives will give you a sense of worth and purpose.
Keep your mind, body and soul healthy. Further your studies if possible, or start studying a subject you have always been interested in. Maybe learn a new language. If studying is not your thing, do research on a subject you enjoy, or simply read.
You must keep your brain engaged. Exercise physically. Walk, run (if you can) or go to the gym. If you enjoy alternative exercise, try yoga. Apply spirituality in your life in whichever way you are comfortable with.
Physical and mental exercise delays dementia and improves overall health. Physical exercise, especially weight training, improves bone density and helps delay osteoporosis and improves balance. If you have good overall health, you are well on your way to a fulfilling retirement. The Grey Zone then begins to change to rainbow colours…
Other factors to consider in retirement:
Make sure your will is up to date and legal (don’t laugh, this is one of the most overlooked and problematic areas in retirement)
Introduce your team of specialists to each other and to your family. The team can include your financial advisor, tax consultant, attorney, and executor.
Discuss various outcomes with your family (spouse and children and other close family members if relevant)
Discuss what should happen in the event of death. Not will issues (although it is important to discuss your will with family members), but burial wishes, heirlooms, care for the surviving spouse, care for special needs family members, and what happens to pets. Anything else that may be of concern to you.
Discuss cash flow issues that may arise in the event of death. Bear in mind that your estate will be frozen for at least six months, until an executor is appointed by the Master of the High Court. This is especially challenging when you are married in community of property, in which case both your and your spouse’s estates will be frozen.
Discuss what should happen if you or your spouse becomes frail or develops an illness such as dementia. A Power of Attorney is not the right option, contrary to what many people believe.
Make sure your surviving spouse will not be subjected to financial abuse. It is alarming to see the number of cases where children and other family members manipulate surviving spouses.
Five years before retirement (Preparing for the Grey Zone)
If you intend to continue working beyond the employer’s stipulated retirement age, start discussions with your employer as early as possible and obtain written confirmation of the new retirement age. Don’t take it for granted.
If extending your employment is not an option, start investigating alternatives as mentioned above. For instance, contracting, owning a small business, training, teaching, writing manuals, writing a book, or exploring the possibility of turning a hobby into a paying hobby. If you don’t have a hobby, get one.
Start engaging with groups that share your interests. Build new social connections, because your social connections at work will disappear.
If you don’t exercise yet, start today.
Aggressively pay off debt. You do not want to carry debt into retirement.
Make sure you understand the sustainability of your retirement funding.
Build cash reserves as emergency funds if you haven’t done so yet.
Engage in activities on your bucket list.
Start discussing your financial future in retirement with your spouse and children. They must understand that your financial situation may be different in retirement.
Discuss your retirement with your spouse. It is important that you are on the same page. Read this article with him or her and get them to follow suit. If both partners can enjoy a fulfilling retirement, life will be blissful.
Remember, a successful retirement does not start the day you retire. Preparation must begin many years before. Also remember that, as important as money is in retirement, it can buy you stuff, but it cannot buy you a fulfilling retirement.
Retire well.
