Baby boomers and FIRE investors should consider the following questions before retiring.  Also known as Financial Independence, Retire Early; this group looks to maximize investment contributions by saving as much as possible early in their careers.  Boomers on the other hand, have been working and investing for decades.  Both groups, regardless of their age and wealth, look to stretch resources through retirement.

What exactly will I do with my time?  During your working years, the demands on your time are often distributed between personal, family, and career priorities.  Each has its own season, sometimes all three competing for your attention.  Post pandemic, it’s become easier by setting your schedule working from home or in a hybrid environment.  Though challenges persist with a limited number of hours each day to get things done.

Upon retirement, you now control 100% of your time, where will you spend it?  For some, it may be continuing to work because socializing is shown to increase longevity and happiness.  For others, they may need to find new hobbies or interests to occupy their day.  Before retiring, it would be helpful to know exactly what you are retiring to.  Where will you spend your time?

There’s a lot written and discussed about accumulating financial resources prior to retirement.  Much less talk about a more realistic question, what are you going to do with your day?  It’s almost as if accumulating a ton of wealth is the answer, you’ll be ok, you win.  Spoiler, it’s not.  Yes, a certain level of assets may generate a desirable income through retirement, but that shouldn’t be the goal for Boomers or FIRE investors.  Why?

Markets contract and expand often without reason or explanation.  If your definition of retirement is based on asset levels, prepare to be disappointed.  Just look back over the last four years, we’ve experienced financial outcomes at all extremes.  All investors want a retirement that will stretch decades. That’s a long duration of watching and acting based on returns, both out of your control and not to mention stressful.

A better approach includes thinking about how you’ll spend your time, both during the week and on the weekends before retiring.  Not only is this healthy, but it helps clarify your definition of retirement.

How do I define who I am beyond what I do?  As a retired partner, consultant, or very successful “fill in the blank”, who will you be now?  So much of our identity is wrapped up in what we do, how do we redefine ourselves now that we’re retired?  This is tricky, there are no straightforward answers.

So much of who we are is defined by the work we do every day, often for decades.  When this work stops, who are we now?  It’s scary to refine yourself beyond what you do, be it in your 40s or in your 60s and beyond.  Where’s the answer?

I believe part of the answer lies in the previous question, “what will I do with my time?”.  Defining your time by testing various activities and new roles will give you a better sense of what you want.

“I like this, I’d like to explore this further.  No, thanks, I’ve been here before and know how this plays out.  Hmm, that’s interesting, I’d like to learn more.”

It’s about trial and error and less about finding the right answer immediately.  How?  Give yourself permission to spend time thinking about alternative approaches well before retirement arrives.  It’s totally ok to call a time out, jump off the treadmill, and think proactively, not reactively about all your possibilities before a decision is necessary.

Speaking of possibilities, ask a friend and mentor the above questions, what do they have to say?  We can learn more by asking others about their experiences and lessons learned.  What have other successful 40 somethings learned about who they are and where they will spend their time?  65-year-olds (and beyond) have a lifetime of stories and experiences, many are willing to share if asked.  How did they figure it out and would they have done it differently knowing what they know now?  This is where a good network, formal or loosely tied together, can supply different perspectives.

Retirement is personal, you and perhaps a significant other must define what that looks like together.  But you don’t have to find the answers on your own, or as a couple.  There are a lot of individuals who have had various successes and failures along their journey.  Everyone has a story.  Asking and listening to others, in addition to answering the above questions, may prepare you for retirement on your terms.

Advisory services through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Flowerstone Financial are not affiliated. Cambridge does not offer tax or legal advice.

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