money clock

By Joel Dresang

Fifteen years passed since I attended my high school class reunion. My youngest daughter is in high school herself now. Her older sisters have grown up and moved away.

Since my last reunion, both of my parents died, I lost a brother to cancer. Some of my classmates died. Others lost loved ones, watched their children grow, have become grandparents. And some have retired.

At 58, I’m at an age where I think about retirement. All but one of my siblings are retired, as are more of my neighbors and former colleagues. Of course, working at a place that empowers retirement has an influence too.

A recent Gallup survey found retirement security to be the top financial worry among Americans – named by 64% of respondents.

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And yet, a lot of studies suggest Americans are unprepared to quit working. The National Institute on Retirement Security found that nearly two-thirds of workers 55 to 64 years old had savings amounting to less than one year of their income. Nearly a third had nothing saved for retirement.

An annual survey by the investment organization TIAA routinely finds Americans making a higher priority of buying an appliance or planning a vacation than building a retirement portfolio.

To be clear – especially to my employer – I am not thinking about retiring. I am, however, thinking about retirement. At what point do I decide to start winding down my work life? When do I start making such arrangements? How will that look? What happens afterward?

An ongoing study by the Employee Benefit Research Institute shows that more of us are postponing retirement. In the 2016 survey, 37% of workers said they expected to retire after age 65; more than triple the 11% response in 1991.

However, around half of those who already have retired say they left work earlier than they had planned – the majority because of hardships such as health problems and job loss.

As I consider all that has changed since my last class reunion – some changes inevitable, some unpredictable, most irreversible – I suppose that I should be thinking more about life after work. The reunion offered me a motley sampling of scenarios:

  • One classmate explained that her husband’s business did well enough that she quit her job so she could spend time between their place in Florida and family in Wisconsin.
  • Another told how he had developed and sold businesses that allowed him to retire to Central America with a summer place in Door County.
  • One classmate recently retired from a municipal job after realizing that his earnings were barely more than what his pension would pay. His wife still works, he said, and he’ll think up something to occupy his time and make extra money.
  • The first person I met at the reunion reminded me that choosing when and how we retire can be a luxury. She and her husband had just found work again after multiple bouts of layoffs and health problems. With their children grown, they are planning to trudge on, work as much as they can, spend little and enjoy each day they have.

It’s not a scientific study, but my chance survey of classmates supports what I have surmised about planning for retirement: Most of us don’t.

Most of us stumble along. Then at some point, we look up and realize that we are approaching some sort of finish line – or it is approaching us – and we’re not sure what to do once we’re past it.

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Even acknowledging that a lot of people blunder into retirement or have it thrust upon them or luck into it, I see the value of trying to control what you can. Be prepared. Here are steps I am taking:

  • Saving. My wife and I are making retirement saving a priority, trying to maximize how much we funnel into my 401(k) and her IRA as well as into our family Health Savings Account.
  • Relating. I’m being more mindful of the time and energy I spend outside of work, trying to arrange more opportunities with my family and to be more flexible whenever they need me.
  • Envisioning. My wife and I have begun to talk about what we (as a couple and individually) want to do when we’re working less – and what we’ll need to do to get to that point. Part of that includes taking care of ourselves.
  • Practicing. Sometimes, on vacation or a holiday weekend, I pretend what it would be like if those days off were mine more frequently. As we imagine what we want to do in retirement, my wife and I need to try out our pursuits so we get a better sense of what may be ahead.

The answer to when should we retire includes lots of variables. Money is just one of them. I have friends who left work without hobbies or interests, and I worried more about how they would spend their time than whether they had enough money.

Ask someone when they expect to retire, and they’re likely to give you an age. That’s one of the variables to weigh. What my high school classmates suggested to me, though, is that – for those fortunate enough to choose – the timing is more a sense of being ready.

By thinking about retirement, talking about it and taking some tentative steps toward it, we’ll be better prepared to know where the finish line is and what to do after we cross it. We’ll also have a clearer sense of how much money will be enough for the retirement we foresee.

Joel Dresang is vice president-communications at Landaas & Company.

(initially posted Nov. 23, 2016)

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