Everyone has a preconceived notion of what they want in retired life. What are your retirement expectations? Interestingly, often our desires may not even be our own. Generally, they’re a compilation of what we’ve gleaned over the years.
Your retirement expectations are determined by influences from:
Over a lifetime we observe and assimilate all these influences. The majority of the time, we’re not conscious how this shapes our perceptions. By the time we’re ready to retire, each of us has predefined expectations that may or may not be based on reality.
Retirement Expectations vs Reality
Many retirees are shocked to find that reality is quite different than their expectations. Instead of entering the best years of their lives, they find themselves feeling bored, restless, and not quite adjusting to their new found freedom. What went wrong?
I have the greatest respect for the FIRE (Financial Independence Retire Early) community. Wish I’d been more aware back in my younger days. There’s a lot to be said about living more frugally and saving for the luxury of retiring early.
Unfortunately, there’s a lot more to a successful retirement than financial preparation. This becomes a false sense of security that “everything will be good”. This mindset is reinforced by all the financial institutions clamoring to sell you their services.
This is why it becomes necessary to review what are your retirement expectations.
Your Parents Retirement
Whether we’re aware of it or not, our parents continue to play a major factor in how we view the world. They instilled their values and morals shaping us in countless ways.
For instance, if they had a happy marriage, we observe and learn the secrets to achieving this for ourselves. Likewise, a successful retirement filled with happiness and contentment, will likely create feelings of optimism that yours can be equally good.
On the other hand, if mom or dad struggled, you may dread the day you leave work. In fact, you may associate retiring with the beginning of the inevitable decline of growing old and living a life of misery.
Some may rally against this and vow to do better. After observing their setbacks, there’s no way they’re going to fall into the same traps. Yet, how much do our parents’ experiences continue to influence us? Are you truly able to break-free to design your own future?
Plans for the Future
Often, our views about fiscal responsibility and saving are instilled at an early age. Did your mother/father take you into their bank to open your first account as a child? They might have encouraged you to save your allowance and earn extra money.
Alternatively, their attitude toward money may have been “there’s never enough”. Instead of saving for a “rainy day”, their behaviour was living from paycheck to paycheck. The values instilled as a child tend to stick with us.
They came from a different generation where company pensions were the norm. They worked hard and paid their bills. To be candid, they weren’t finance gurus. And, they didn’t need to understand financial markets and the management of retirement saving funds.
Yet, according to PRNewswire, 3 in 5 Americans rely upon their parents for financial advice. We trust them, plus they are free!
In all fairness, they passed on what they knew. Most of us are more comfortable discussing our financial affairs with them rather than a qualified professional.
In fact, only about 17% of Americans use a financial advisor! To make matters even worse, anywhere from 20-25% don’t participate in company matching 401K programs.
That’s not to say that everyone needs a financial advisor. Many folks have educated themselves and created a successful DIY portfolio.
As an example, Freddy Smidlap’s series on Missy Malevolent reveals how even a new investor can outperform the market. In my opinion, it’s one of the most interesting and informative approaches to learning how to invest.
Your Partner's Expectations
Most certainly your spouse has an opinion as it’s their retirement, too. Having a lifestyle conversation is every bit as important as the financial one. Seldom will you agree on everything so expect to be working through some compromises
This requires open honest communication and listening to your partner. Only then can you strike some balance that meets each of your needs.
For instance, they might prefer living in Florida; whereas you’d sooner stay put. If you can afford it, the compromise might be wintering in the sunshine state.
However, if you’re at opposite ends of the spectrum and unwilling to find common ground, it will affect your relationship. That could lead to a rocky ride with simmering resentments and, ultimately, neither of your expectations being met.
Unspoken Hopes and Dreams
Usually, in the partnership, there is one of you that’s more the dreamer while the other one is the practical and down-to-earth one. This is a good thing! Embrace the differences.
Whereas the starry-eyed one will be more willing to figure everything out as you go, the more pragmatic one will be planning the details. That’s actually highly complementary when you combine that vision with the nuts and bolts of execution.
When you’re discussing what each of you wants out of retirement, rather than generalize, be specific with what each of you wants. Where to live, what to do, anything and everything you deem important.
As an example, if your dream has been to hike the Inca Trail to Machu Picchu, don’t say we should visit Peru some day. Maybe you’re concerned they wouldn’t be up to it. In all fairness to your partner, they might surprise you.
Alternatively, they might be okay with you doing the hike while they take the train to the Machu Picchu ruins.
Someone You Admire
Another influence are people we respect and admire. This might be someone you know personally or only casually. The point is you respect them and aspire to be somewhat like them.
For myself, it was a close friend and co-worker of 25+ years. Always quick with a joke and living what I considered a rich and fulfilling life. After retiring, we regularly got together all the while impressing me with how happy and content he was.
I’ll never forget that evening we got together for beer and wings. He and his wife showed up in a bright yellow Pontiac Solstice sports car. His pride and joy, as they shared tales of their adventure driving the Oregon coast.
At that moment, I would've killed to have my own sports car! But that wasn’t my real desire. Rather, I absorbed we need to live our dreams and find the happiness we all deserve.
It’s probable that someone has, also, influenced your perceptions. While it’s healthy to want to be more like them, recognize what's most important for you.
Whether we like it or not, the media also plays a major role. All that advertising portraying happily retired couples taking the vacation of a lifetime, downsizing into an all-amenity complex, and all the other products and services targeting baby boomers.
If we buy into how the media and advertising portray everything, we’d all be broke. That’s consumerism on steroids! The truth is money doesn’t by happiness, it only rents it for a while.
Lately, there’s been a lot of advertising on upscale senior/adult communities. They look absolutely fantastic and I think to myself how wonderful they must be. They’re selling the idyllic lifestyle pampering our every need. In reality, they’re overpriced and certainly not for everyone.
Equally insidious is the marketing of financial institutions. Only by letting them manage your money will you achieve your golden years.
They’re using these tactics and hype to sign you up to their products and services. While many may offer excellent service, others push in-house portfolios with high management fees and low yield returns.
The unspoken message, if you haven’t saved at least 1 million dollars, you’re going to have a shitty miserable existence. How does that impact the average persons expectations in retirement?
The scary fact is over 45% of all Americans haven't saved anything at all! Their future is going to be bleak, especially considering the state of affairs for Social Security. Baby Boomer Facts goes into more depth on the pending retirement crisis we’ll all need to navigate.
How to Satisfy Your Retirement Expectations
First of all, what are your retirement expectations? Think about that for a moment.
Understand how you’re shaped by all these influences. Unravel what's really important to you and what is extraneous. Without a doubt, you need to be financially prepared. That's but the foundation of the next stage of your life.
If you're all doom and gloom, it becomes self-fulfilling. Assuming you have a positive outlook, what will make these the best years of your life?
By already thinking about a vision for your retired years, you are planning and educating yourself on what you want, need and desire.
To help further this process, writing a retirement plan will put your thoughts on paper making them even more tangible and organized.
Closing Thoughts on What Are Your Retirement Expectations
Each of us has ideas and opinions on what retirement should be like. Generally, these thoughts are influenced by our parents, spouse, someone we admire and/or the media. Some of these may not even be what you really want!
Too many retirees flounder never reconciling what they think they want with what they really need.
While considering various opinions, recognize what's important to you and what you desire. After all, it’s your retired life. Plan, prepare and choose to make it the best years ever!