Most Americans hit retirement and never look back. In fact, three-quarters of recently retired baby boomers say they are very satisfied with their lifestyle in retirement, according to an Ameriprise Financial survey of 1,000 Americans ages 60 to 73 who have at least $100,000 in investable assets. They are happy with both their finances and their free time.
But what about the 25 percent of baby boomers who aren’t satisfied with retirement? “The retirement industry has probably done a disservice to savers in marketing the image of an ideal retirement,” says Jeff Scott, vice president of corporate benefits and retirement at insurance and consulting firm NFP. Seniors may have been sold on the idea of retirement as one long vacation when the reality is quite different.
Fortunately, seniors who are dissatisfied can reset a retirement gone wrong.
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Figure out what needs to change. Before seniors can hit the reset button, they need to figure out where things went wrong with their current situation. Finance experts say limited savings can be one cause for unhappiness, but it isn’t the biggest problem they see. “What I have found with clients is that they are getting bored quickly,” says Bill Van Sant, senior vice president and managing director at Univest Wealth Management in Souderton, Pennsylvania. “They do everything on their bucket list in a year.”
Dan Yu, managing principal of EisnerAmper Wealth Advisors in New York City, says lack of purpose is a problem he sees with his clients who often held leadership positions in the workforce. “They are really sort of struggling with what to do next,” he says. Whether it’s a lack of money or a lack of purpose, understanding what is driving a senior’s dissatisfaction is critical to turning around an unhappy retirement.
Create a financial and life plan. A written financial plan and a list of lifestyle goals can help bring greater retirement satisfaction. Marcy Keckler, vice president of financial advice strategy for Ameriprise, says that when her company surveyed baby boomers, they found those with a written retirement plan were better off than those without one. “It’s never too late to get that written plan in place,” Keckler says.
People often struggle with moving out of the acquisition phase of savings. “Now they are drawing down their nest egg, and nothing is feeding it,” Van Sant says. “It kinda freaks them out.”
Meeting with a financial planner who can forecast how long money will last at various withdrawal rates can help retirees feel peace of mind about their money situation. It’s also a good time for retirees to review their budgets. “Once you get into retirement, you have a better idea of what you’re spending week to week and month to month,” Keckler says. That knowledge can be used to tweak a budget created before retirement and make it more realistic.
Explore new hobbies and activities. Retirees who are dissatisfied with retirement for personal, rather than financial, reasons have a couple different options. The first is to find new activities to fill free time. “I find a lot of people don’t have a lot of hobbies,” Van Sant says.
Developing a hobby is one way for retirees to spend their days, and volunteering is another fulfilling way to fill gaps in a schedule. “I find that retirees who participate in volunteer work or service have higher levels of satisfaction than those who don’t,” Scott says.
Enroll in educational classes. Seniors may find retirement is an excellent time to explore areas of interest they previously couldn’t pursue. “Most times, you want to get away from what you did for 30 years,” Yu says. He recommends that his high-achieving clients take courses or classes. “Then they can do something they are extremely passionate about,” he says. The goal with these classes is not to earn a degree or start a new career. Instead, they are to be used for personal satisfaction and self-betterment.
Go back to work. Sometimes the best way to reset a retirement is to go back to work. This option may be a necessity for seniors who left the workforce too early and have meager savings. However, for others, going back to work creates social connections and routines that may be lacking in retirement. “They were surprised by the degree to which they missed their connections with colleagues and work,” Keckler says about the dissatisfied boomers surveyed by Amerprise. Retirees don’t have to go back to the same job or work full time to make those connections again. A part-time job or consulting work can preserve free time while providing the social benefits — and extra income — of employment.
Adjust expectations. Resetting a retirement isn’t only about making lifestyle and financial changes. Retirement means adjusting expectations and adapting to a new routine. “While cruising to exotic places and enjoying fireside conversations with friends and loved ones may be the dream, it doesn’t guarantee happy retirements,” Scott says. “My advice would be to pick up a long-desired hobby, go mentor a grandchild or family member and give back the wisdom acquired through living life.” This quieter approach to retirement may not be flashy, but for those looking for a reset, it may be more realistic and more satisfying.