Mentioned in our prior blog post, why not test drive a mini retirement before the real one arrives? I believe the key to a successful long-term retirement is taking a break or reducing hours before it’s necessary. This may be easier for some professionals based on their line of work. The purpose is to see what it feels like as you take more control of your time. What you learn through this experience may alter your definition and expectations of what a desired retirement may look like.
Tom Brady recently “test drove” retirement, he’s not ready. I’m guessing he has enough financial means but is not there mentally to begin his second career. Having the proper mindset is equally (or more) important then having the correct resources in place. That sounds counter intuitive, but mindset matters over money. What steps may you take in preparing for a retirement “test drive”?
Start by thinking about how you may repurpose your time in a manner that suits you. Who are you spending time with and what are you doing? Nothing is happening immediately so give yourself permission to think freely. Think big, outside the box, what are you doing that makes you happy? For some that may be volunteering or instructing. For others it may be a fresh start in a new career, or perhaps sitting on a board. It may also be doing nothing, but this gets boring after a while. What is it that you want?
Be as detailed as possible and write down your thoughts. This offers the opportunity for reflection and provides context in the bigger picture. Ask your spouse or significant other to contribute-what’s on their mind and how do they feel about this experiment? Their answers may be completely different than yours and that’s ok. The first step is to explore possibilities and communicate with those who depend on you.
Taking the above action allows you to avoid the trap of viewing retirement with a dollars first mentality. Being so focused on accumulating $x million of investable assets may blur your vision. Instead think about your time and what you choose to do with it. Resources are necessary but shouldn’t be directing your definition of retirement. Concentrating on rates of return largely out of your control misses the point. It also increases friction and anxiousness around numbers which may lead to reactive decisions. “More” is the default answer when you haven’t set time aside to define what “enough” means.
Having a date and duration specific financial plan outlined in advance will assist in quantifying “enough”. It’s acceptable for your definition to shift overtime as you become clearer on what you want. Nobody has a crystal ball and can predict with a high degree of certainty what a four-decade retirement may look like in advance. Learning by doing is exactly what a mini retirement offers those who are willing to take a test drive.
The next step is assessing your current employment. It’s a big move leaving your employer, though many seem to be following this path today. An easier choice (if you are content with your work and your employer appreciates you) may be to reduce your responsibility level and time in your current role. A growing number of employers are open to this reduced schedule in an effort to retain top talent. Before you inform your employer of your intentions, consider the following.
- What exactly does it take to cover your essential and discretionary spending each month?
- What’s the desired timeline in your mini retirement?
- How much room for error or opportunity is offered by your financial resources?
- How may you strengthen your physical and mental health during your test drive?
There are a growing number of professionals who have had enough and are contemplating a sabbatical or time out from where they are today. The desire to catch your breath and simply think if even for a short period of time is priceless. It’s too easy to get stuck running hard serving your team, employer, and clients. Stepping back requires self-reflection, faith, and belief in yourself that it’s all going to be ok. This uncertainty may keep many from taking the next step. That’s unfortunate as those who have taken a test drive know the experience is worth it. Creating a plan makes it possible.
If you’d like to learn more or simply start a conversation, we’re here for you.
Advisory services through Cambridge Investment Research Advisors, Inc., a Registered Investment Advisor. Cambridge and Flowerstone Financial are not affiliated.