Goals-based planning
Retirement: Planning for what’s next
“So…What do you do?” It’s a staple conversation starter at American cocktail parties, but it can rattle an unprepared retiree. That discomfort speaks to the trickiness of the transition to retirement. There’s great opportunity in this life chapter—but you need a plan to seize it.
While you may naturally focus on the financial aspects of retirement (and they’re undoubtedly important), they’re just one part of the story. In making this transition, you also need to balance psychological, social and emotional needs. You’re creating a new identity, after all, separate from the identity of your working years.
In our survey of retirees, among households with more than $5 million in assets, 79% said they wish they had spent more time preparing emotionally for retirement, and 64% said they wish they had spent more time preparing physically for retirement.1 Take heed from those who have gone before you: Make a plan that encompasses all elements of the retirement experience and you’ll find yourself a happier and more confident retiree.
Be open to the unknown
Retirement is full of unknowns, and we often underestimate how difficult it can be to anticipate what’s ahead. Especially when you feel financially comfortable, it’s easy to romanticize the endless possibilities, the newfound time to do…well, whatever you want. But too much choice can be scary. A blank canvas is intimidating.
What’s more, we don’t know how long this life chapter will last. People are living longer and doing everything they can to live healthier for as much of those extra years as possible. As you enter this new stage of life, you’ll find that your priorities and the ways you spend your time change. Think about what you find most fulfilling and want your new lifestyle to include.
If you’re 65 today, the probability of living to a specific age or beyond
Source: J.P. Morgan 2025 Guide to Retirement; Social Security Administration, Period Life Table, 2021 (published in the 2023 OASDI Trustees Report); American Academy of Actuaries and Society of Actuaries, Actuaries Longevity Illustrator, http://www.longevityillustrator.org/
There’s an unavoidable element of uncertainty, and that’s a challenge in thinking about how you want to use your resources—your time and your wealth—in a life chapter that can span many decades.
Make a plan
You’ll find it’s much easier to manage that uncertainty if you have a plan for retirement in place. (Control what you can control and accept what you can’t.) Your plan should address some basic questions.
How will you find purpose and satisfaction in your new life? What will fill your days? Sit down with your spouse/partner and talk frankly about what you each expect from retirement. If there are differences, try to find a solid middle ground. If one of you is still working, discuss how you will manage different schedules and life rhythms.
Beyond your immediate family, where will you find a sense of community? With whom will you spend your time? Their choices and lifestyle will likely influence your own. Many of us don’t realize how our work provides important social connections in our lives. Think about what might replace your office cohort.
You don’t have to stop working altogether, of course. If you’re happy doing what you’re doing, you might opt to simply pare back. Or you could use your skills and talents for new purposes—serving on a nonprofit board, perhaps, or mentoring young people.
Tackling all these issues will help you decide how you want to spend your time and wealth. More specifically, it will help you determine how much of your wealth you want to allocate to lifestyle needs versus legacy goals for heirs and beneficiaries. How much of your wealth can be allocated to the “family bank”? The more specific you are about your goals, the more committed you will be to achieving them.
Understanding the various components of the retirement experience allows you to create a clear vision for this life chapter. A well-crafted investment strategy, one that balances liquidity, current income and long-term growth, can then be created and effectively managed over time. You can’t align an investment strategy to your retirement goals if you don’t know what they are.
Simple steps
You want to approach your retirement as though you were preparing to run a marathon.
Like a runner, you need to warm up your muscles before reaching the starting line. Here are some warm-up exercises you might try to prepare for a successful retirement.
- Start 20 activities you might want to do in your retirement—and give yourself permission to quit at least 15.
- Live off-season in your summer home before deciding to move.
- Rent a house before relocating to a new area or to be closer to family.
- Get a thorough medical exam so you can maximize your physical well-being.
- Explore ways of giving back to your community.
- Take a short-term consulting assignment and see if you’d like to continue the connection.
- Take a class in a subject that’s long held your interest.
Above all, try a range of different options before making a full-time commitment. Don’t be afraid to shift gears, before and after you retire.
The ongoing evolution of your plan
As you’re trying out possible retirement experiences, it helps to have a feedback loop with your spouse/partner and other important people in your life so you can refine as you go along. Connect to people who are already retired to learn about the pitfalls—and pleasant surprises—they have encountered.
It’s not as though you do all your homework and boom, you’ve got a 100% foolproof plan for retirement. Options will evolve, your feelings will change, and you’ll want to talk things through with people you trust.
The new active retirement
Retirement today is nothing like it was 30 or 40 years ago when people essentially went “cold turkey” for a life of leisure. It’s a much more active life chapter.
So take your time, do your homework. Think carefully about what’s important to you and what you think will give you the greatest satisfaction in this life chapter. Try new experiences, and move on when they don’t click. When you attend that cocktail party as a newly minted retiree, you want to be proud and excited to answer the inevitable question, What do you do?
1Source: J.P. Morgan Private Bank Research, 2020. Total N= 1,500. Percentages reflect responses across age groups (21-51+).
Important Information
How do you want to use your resources—your time and your wealth—in a life chapter that can span many decades? First, make a plan.
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