OPINION

JUST PLAIN TALK: A different take on retirement planning, by maintaining friendships

Buz Livingston
Buz Livingston

Often people change employers but keep the same career. For me, that was impossible; when I graduated from college, the Certified Financial Planner Board didn't exist. In a way, I'm a creature of the 21st Century; there's no way I could run my business without modern technology. Improved broadband would undoubtedly help. Maybe we can get help from the state, wink, wink.

When I began looking and planning a career change, retirement planning was about saving enough and investing with a bit of insight to reach a certain number, then boom, retire. Perhaps that was an offshoot of the transactional nature of investment planning. But things changed and for the better. Of course, having enough money for retirement cannot be underemphasized, but health and relationships with peers are equally important. Importantly, all three require diligence before retirement and afterward. Think of retirement as a three-legged stool.

At Morningstar's Investment Conference, held last September, Michael Finke cited data from a longitudinal study from 1994 through 2018 with over 20,000 retirees. It does not take a retirement expert like Finke to realize more money is better than less. As the aphorism goes, being rich is better than being poor, but it doesn't take four million to be happy. Finke stresses maintaining friendships outside the workplace is just as crucial as socking away more money in your 401K.

One of the most brilliant people on the planet, Cheryl Holland, pointed out that relationships with peers depend on social networks. It can be a spiritual community or your family. In addition, she sees clients looking for "creative fulfillment." They may decide to scratch an itch to paint or pick up a long-dormant musical hobby in retirement. Some may want to write or spend time in a garden; both have tremendous appeal to me. Plus, homegrown veggies are best.

It's important to consider what can go wrong in retirement. A pitfall for many well-meaning parents is adult children who come back home, euphemistically known as failure to launch. Holland stresses a key to a successful retirement is not coddling adult children and helping them develop skill sets so they can stand on their own. Often people think they will get closer to their children during retirement, but Finke points out the data doesn't support that notion. Instead, your relationship with your spouse and friends brings more satisfaction.

While your working career gives you plenty of social interactions, those may disappear during retirement. Finke argues we should look at retirement as a new job, albeit with great benefits. But don't look at it like six Saturdays and a Sunday, or you will be disappointed. He points out that a beach cottage or an RV may sound like a great idea but can increase social isolation. On the other hand, either one can lead to interactions with new people if you work at it.

Like most things in life, the more effort you put into it, the more satisfaction you get.

You can't always get what you want, but Buz Livingston, CFP, can help you figure out what you need. For specific advice, visit livingstonfinancial.net or drop by 2050 West County Highway 30A, M1 Suite 230.