'The Best Is Yet to Come' — Five Things You Gain in Retirement
Retirement should be a time of exploration, expansion and delight. So if you've done your planning well, enjoy these five retirement perks.
You don't have to croon The Best Is Yet to Come to anticipate the salad days of retirement. Sure, some people bemoan the idea of getting older. But a well-planned retirement can feel like balm after a lifetime of hard work.
It’s easy to think of retirement as a period of loss — the loss of your paycheck, the loss of your identity, and the loss of the routine you’ve maintained for years. But there’s actually lots to look forward to in retirement.
Whether you decided to retire early, worked into your seventies or eased into the transition with a phased retirement, that excitement you feel is justified. Here are five key things you might gain once your career comes to an end.
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1. Financial freedom
Many people worry about not having enough money in retirement. But a recent Employee Benefit Research Institute survey finds that 67% of workers are confident they’ll have enough money to live comfortably once they retire. And 78% of current retirees feel the same way.
It takes a combination of savings and solid financial planning to feel secure in retirement. But with the right approach, you can gain a sense of financial freedom you may have never had before.
Kristen Beckstead, CFP, ChFC, vice president and financial planner at First Horizon Advisors, says that a clear plan is essential for retirees to attain financial freedom. And it starts with understanding what you want retirement to look like.
"Saving is part of it, but not the only important piece," she says. "The bigger picture is about understanding your personal spending, having a flexible withdrawal strategy, and being ready to adjust as life and the market change."
Beckstead says the first thing to do is understand your expenses.
"Ask yourself what your must-haves are each month — things like housing, food, insurance. Next, make a list of your nice-to-haves, like travel or hobbies," she explains.
From there, it's a matter of matching spending to your income, ensuring the numbers align, and managing your savings accordingly. That means being careful with retirement plan distributions and not withdrawing too aggressively, given your life expectancy and investment mix.
"A good rule of thumb is the 4% rule, but that may not work for everyone," Beckstead says. "Everyone’s circumstances are different, and some people might need to be more conservative, especially if they retire early or want to leave money behind."
Beckstead also recommends a withdrawal strategy that's tied to market performance.
"Taking less in down years and more in growth years could help your money last longer," she says.
Another strategy that works is to take a tiered approach, withdrawing from safer investments early and from more growth-oriented ones later.
"This idea aims to meet present spending needs while also planning for potential increases in future expenses, such as healthcare," Beckstead says.
2. Guaranteed income
You might think that earning a paycheck is a great way to guarantee yourself a monthly income. The problem, though, is that jobs can be eliminated without much warning.
The nice thing about retiring is that you may have access to several sources of guaranteed income for life. One might be a pension from your employer. Another could be Social Security, which many retirees with at least a 10-year work history or longer qualify for.
In fact, if your goal is to attain financial freedom in retirement, one thing you can do is delay your Social Security claim beyond full retirement age, which is 67 for anyone born in 1960 or later. Each year you delay claiming Social Security results in an 8% increase in your monthly benefits.
Delayed retirement credits for Social Security stop accruing once you turn 70. But you may be able to boost your monthly benefits by 24% by waiting until then to file, thereby locking in more guaranteed income for the rest of your life.
An annuity could be an additional source of guaranteed income in retirement. Before you buy one, though, make sure to understand the pros, cons, and opportunity costs.
You may get stronger returns out of an investment portfolio. And if you change your mind on an annuity, you could face hefty surrender charges.
3. Time
When you’re tied to a job, your time is not your own — at least not while you’re on the clock. You might spend the bulk of your day at a desk, and you might spend a good chunk of your evenings and weekends following up on emails and chasing project updates.
In retirement, you get to reclaim your time and use it as you see fit. That means if it’s a glorious day weather-wise and you don’t feel like being stuck indoors, you can go for a hike, have a long picnic lunch by the lake, or spend hours on the phone with your grown daughter if you’re in the midst of an engaging conversation.
Similarly, if you have places you love to travel to, you can book an open-ended ticket and see where your journeys take you. There’s no need to rush back for meetings or deadlines.
If you are stepping away from an intense career, you may struggle more with your identity and newfound time than other retirees do. If that sounds like you, I recommend reading "Retiring from Excellence: Why Driven Professionals Struggle as Beginners in Retirement."
4. A new perspective
When you're in the midst of your career, you may be focused on things like climbing the corporate ladder, upgrading to a larger home, or finally buying the nice car you've always dreamed of owning. But in retirement, your perspective can change, and sometimes for the better.
A recent Transamerica survey found that retirees' top priorities are enjoying life and being healthy.
Retirement is a great time to take stock of your life and figure out what’s most important to you. And you may be surprised — in a good way — at how much your perspective changes.
Retirement might also help you see yourself in a new light. A lot of people spend their entire lives getting to know themselves. When you’re not rushing to work or worrying about paying the mortgage, you can focus on being the type of person you want to be for yourself and those around you.
There are also certain activities you can engage in that might help you develop a new, more positive perspective.
"Many times, gaining a new perspective occurs when individuals engage in self-reflective activities such as life reviews, storytelling, or journaling," says Stephanie Lewis, LCSW, and VP of Clinical Operations at Epiphany Wellness.
5. New social connections
In retirement, you have a real opportunity to expand your social network and actively reach out to new people. When you're not busy with a full-time job, you may have more time to find like-minded people who share your interests and values.
Amy Morin, psychotherapist and mental strength coach, says, "The people I see who make the transition to retirement best get intentional about who they want to be and who they want to surround themselves with during this next stretch of life."
Morin recommends setting social goals for yourself to build a network of meaningful connections.
"That may mean inviting three different people to coffee every week or attending pickleball twice a week," she says.
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