Don’t Let Your Dreams Go Unfulfilled: Plan for Your Passion in Retirement

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When it comes to planning for retirement, much of the focus is on having enough money for housing, health care, and day-to-day expenses.

But what about passions? Whether it's traveling the world, pursuing a hobby, volunteering, or simply taking an annual trip with the extended family, many people don’t plan for what they will do and how they will afford it once they stop working.

Without proper planning, those dreams may be left unfulfilled. While planning how to pursue your passions might not seem as urgent as making sure you have enough money to cover your expenses, finding a way to achieve at least some of those dreams is key to a happy retirement.

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After all, what good is working and saving all your life if you can’t realize your dreams once you retire?

“Americans see retirement as a time to pursue the passions they couldn’t during the working years, yet only 11% have sat down and planned or budgeted for those activities,” says Tim Seifert, senior vice president and head of retirement solutions and distributions at Lincoln Financial. “We have all these great dreams...the bottom line is that we have to properly prepare for them.”

Alliance for Lifetime Income found through its research that only one in twenty retirees actively spend down their assets in retirement, while two in three are preserving it for future expenses at the cost of enjoying the present.

“They are spending so much time worrying versus actually enjoying it,” says Seifert.

But it doesn’t have to be that way. Here are three steps you can take to plan for your passion in retirement.

Step One: Think about your retirement passion

When planning for your passion in retirement, the first step is to really think about what you want to do once you stop working. It's something many people don’t give much thought to, but without a plan, you won’t have permission to spend.

“Some people are very excited and have a whole list of things they want to do in retirement, and for other people, their whole life is centered around work and they don’t think about it,” says Sharon Carson, executive director of J.P. Morgan Asset Management. “You can’t plan for it if you don't know what it is.”

Carson says people should start envisioning what their retirement will look like in their mid-50s. It doesn’t have to be etched in stone at that point and will undoubtedly be fluid, but you should start thinking about where you want to live, what you want to do and what will give you a sense of purpose, a reason to get up in the morning.

The answer will be different for everyone. For some, it could mean moving to a 50-plus retirement community and living a social and active lifestyle. For others, it could mean staying put and pursuing a new career, hobby or volunteer work. Moreover, they may want to live close to their grandchildren, travel the world, or live a life of leisure, splitting their time on the golf course and a cabin in the mountains. Regardless, without the vision, you can’t begin to plan both financially and emotionally for your future.

Eric Dostal, managing director at Wealthspire Advisors, helps clients envision their passion in retirement by putting together a list of everything they want to do once they retire and forcing them to be as specific as possible.

They can’t just say I want to retire and sit on the beach or play golf, but instead, list what they will do every day for the next ten, fifteen, and even twenty years of their retirement. Then he asks them if they can see themselves doing that day in and day out. “It makes them think about it a little more and can be really helpful,” he says.

Step two: Test out what your retirement will look like

Once you know what your retirement passion is, next up is to give it a test drive. This should help you ensure your retirement dream is something you’ll actually want to pursue full-time..

Sandra McPeak, a financial adviser at Wells Fargo, recalled one married client who decided she wanted to retire at 50 and travel while her husband continued to work. She was sure they could afford to live off one income, but once she quit, she didn’t travel as much as she thought she would, and when she was home, she was bored.

Plus, she realized they could still use the second income, but when she tried to get her old job back, she wasn’t able to get that or a similar one.

“It’s like musical chairs,” says McPeak. “Once you give up your chair, someone else will grab your chair, and when you decide you want your chair, there are no chairs left.”

That’s why McPeak says to use all your time off to test drive the passion and see if it’s something you want to do all the time. You may find you don’t love it as much as you thought, or that doing it part-time is a better option, or you may find you can’t wait to retire to get busy on your next chapter.

Step three: Figure out if you can afford it and plan accordingly

Once you decide on your passion, you can then get to work planning for it emotionally and financially. Sometimes there will be a cost — say you want to buy a boat and sail around the world — and sometimes it's more about being purposeful about how you spend the time.

With an idea in mind, you can scale up or down your financial plan, including how you save and invest to achieve those goals, says Dostal.

The planning can be more general the younger you are, but as you move closer to retirement, the more particular you need to be. “It will take some time and thought,” says Carson. “You can refine the plan as you get closer.”

You may find your retirement passion is too expensive for your budget, which may require you to work longer or craft a different plan, or it may be that your plan is good to go as is.

The takeaway: Have a plan

Regardless of your passion in retirement, the key to making it a success is having a plan. Not only will it help you determine how you’ll spend your time and give you a reason to wake up every morning, but it will limit the likelihood of you encountering any big financial surprises.

While many people think expenses drop when you retire, that’s not always the case, says McPeak. Sure, you may not have to spend money on commuting to work or for lunches outside of the home, but you may have higher medical costs that you didn’t factor into your budget.

Or your hobby may be a lot more expensive than you had anticipated. Without that plan, you could end up with a retirement shortfall.

“If your passion is to go fly fishing in Alaska, you’ll need a charter plane, and that’s pretty expensive,” says McPeak. “I don't think people put enough thought into it, and sometimes they make mistakes.”

Donna Fuscaldo is the retirement writer at Kiplinger.com. A writer and editor focused on retirement savings, planning, travel and lifestyle, Donna brings over two decades of experience working with publications including AARP, The Wall Street Journal, Forbes, Investopedia and HerMoney.