Why you should think about giving your retirement a trial run
Sometimes events stop us in our tracks and make us re-evaluate everything.
In 2006, my friend Ken’s wife had a brain tumour.
Thankfully, she’s now fully recovered – but at the time, for both of them, it completely changed their outlook on life.
There were some activities they’d been holding back on until they’d retired. But now, they no longer wanted to wait.
Instead, they changed tack and have spent the last few years ticking off things from their ‘bucket list’.
To me, this makes a lot of sense. Their previous path had been what’s known as a ‘deferred’ life plan.
I can still remember an actuary I know describing a plan like this as “a bit of a risky bet”.
Those words have always stuck with me. Essentially, it’s putting off all the best bits of life to the end. And what’s the point of doing that if you risk never having the chance to experience them?
Why not try a ‘mini retirement’?
Retirement used to be much more cut and dried. You were waved off from work (maybe with a nice gift) and that was it.
Enjoy your pension, feet up, retire to the country, or head out to the golf course. The end.
Now, more people are choosing to ease into retirement. It’s a transition, not a cliff edge. And when you’re winding down in this way, having a deferred life plan make even less sense.
My suggestion as an alternative is a ‘mini retirement’. It’s kind of a trial run, testing what the real thing could look like, an opportunity to try out some of the ideas you’ve been saving up.
So, rather than holding back on that ‘trip of a lifetime’, you can do it now. Then, over time, you build up towards your perfect or preferred retirement.
Sometimes a mini retirement might lead you in new directions. Like my friend whose plan was to take a year out after retiring and live in a country where he couldn’t speak the language. Rather than wait until he’d retired, he took the leap early and moved to France for 12 months.
And even though it wasn’t the original goal, that year-long adventure turned out to be permanent. He’s now bought a place in rural France, just outside Toulouse. He’s learned the language and plans to live there forever. Just think what might have happened if he’d deferred that plan until later.
Think about what’s really important to you
So, what do you need if you’re planning your mini retirement? What could you be ‘practising’ now?
Here are a few things to think about.
What are you passionate about? It’s easy to forget about what you really enjoy, especially after 25 years or more of paying a mortgage or bringing up kids. You could use this time to reignite a passion in a pastime – or maybe there’s something you’ve never done that you’ve always wanted to take up?
What’s your life purpose? What’s going to be your reason for doing things? Retirement doesn’t have to define you – you’re more than just ‘Person X (retired)’. Maybe your purpose is spending more time with an extended family? For others it might be giving something back: volunteering, or putting skills developed over a long career to good use, such as a consultant, mentor or sitting on a board.
Financial security. Of course, having your finances in place is a vital consideration. Will you have to tap into your pension early, are there other investments you can draw on first? We can help you adapt your financial plans to take a mini-retirement into account, finding you the best solutions and helping you understand the adjustments you might need to make to your investments.
And finally, have fun. In case you’d forgotten. The main thing about retiring should be taking some deserved time to enjoy yourself.
And… if you’re worried about running out of things to do by the time you get to proper retirement, you might just surprise yourself.
In Ken’s case, they’ve now finished their bucket list, but they don’t see that as a problem.
The things the liked doing? They’ll do them again. The others? They won’t. And there will be new things they’ve not even considered yet. When he’s asked what their plans are for when they do finally retire, his answer is pretty simple: “we’ve still got plenty to do”.
Get in touch with us to find out more.