Practice Makes Perfect: Rehearsing Retirement

Practice makes perfect

Athletes practice before they take the field. Actors and musicians rehearse before they take the stage. Couples date before they take the plunge into marriage!

So why do so few people practice before they retire?

It may seem strange and perhaps a bit kooky, but jumping into a major life change without so much as a dry run can create significant stress—and studies show how harmful stress can be.¹

But how do you practice retirement? We have some tips.

Rehearsing retirement

Retirement is a physical change—completely obliterating your long-standing weekday routine—and an emotional and mental shift in your daily thinking. So, we think it’s important to rehearse retirement in two ways.

Reinvent your routine

In other words, what will you do to fill your time?

People who are nearing retirement talk about taking trips or visiting family. And while those are amazing ways to use your free time, they probably won't fill up your day-to-day. Instead, you may need to create a new routine.

Think about hobbies and activities you like to do but, while you were working, needed more time to pursue them. Consider things like volunteering, picking up a new sport (pickleball, anyone), and ways to remain social with your old friends while seeking new ones who may also be retired.

Perhaps you’ve always wanted a pet—now may be the perfect time for a furry friend. Or rediscover a prior hobby and seek part-time employment. For example, you may want to teach a dance class since you've always loved dance. Maybe consider the projects you haven’t gotten to over the years, like planting and maintaining a garden. The idea is to remain physically active, mentally challenged, and socially engaged.

Anticipate a financial hiccup

If you’re making the leap into retirement or you’ve already stopped punching the clock, you probably feel comfortable with your financial situation. But how would you handle it if you estimated incorrectly, or the market hit the skids, and your assets are dwindling faster than you expected?

Here’s where your retirement dress rehearsal comes into play.

Start by determining if a financial shift is temporary as you wait for the market to recover, or a permanent change. Then think about available financial moves. Consider your discretionary vs. non-discretionary spending and where you can make adjustments. In addition, investigate ways to boost your income.

Play out various scenarios: For instance, can you lower your utility bills by cutting your cable cord and instead use a streaming service? Can you reduce your car payment by getting a more economical vehicle? Or you could reduce your food bill by eating at home or hosting potluck dinners with friends instead of going to restaurants. Consider using your gardening skills by growing your own vegetables or raising chickens. (These ideas may give you something to do and lower your costs!)

In general, on the spending side, you want to think about which expenses you can cut out for the short term or entirely. Some things may be small. For instance, if you’re learning a new sport, take group lessons instead of private ones. But other items may be more significant, like forgoing the purchase of a new boat or not paying for your child’s wedding.

And on the income side, you may need to consider whether you should adjust the amount you take from your sources of retirement income. For example, should you take Social Security earlier than you planned initially? Or dip into your investment accounts to help meet your lifestyle needs?

 

A dry run can help you experience what may happen if a financial shortfall occurs and how it may impact your lifestyle. We think it's essential to test the waters so that should the situation arise, you are ready to tackle it.

The goal is not just to retire but to live the retirement you want

Retirement may be your goal as a young worker—and even as your older self. But too often, thinking about what you’ll do during your retired years—which can last for decades—is an afterthought. Unfortunately, that may be why some studies show that when people retire “on time”, they have a higher mortality rate.² Of course, other factors—like health—may affect that mortality rate. But we firmly believe if the goal is retirement and you’re unprepared for the physical, emotional, and mental shift in your daily life, you may be disappointed or worse. So as the saying goes, practice makes perfect, and rehearsing for this new era in your life should become front and center.