How to Test-Drive Retirement

When most people think about retirement, they usually give great consideration to whether or not they have enough money/savings/income to retire. However, they often don't think much about their time in retirement -- what they'll actually do with all the free hours they have on their hands.

Smart Money says this is a mistake and suggests that people test-drive retirement. Their thoughts:

Unfortunately, "a lot of people don't reflect at all on how they will spend their time once they retire," says Elaine Scoggins, a certified financial planner with Merriman Inc. in Seattle. That failure, she adds, can result in boredom, spousal conflicts and, at worst, depression. So, if you haven't done so, sit down and map out what a typical week might look like in retirement. Fill in a calendar with as many specifics as possible. Volunteer work on Monday and Wednesday? Tennis on Tuesday? Photography classes on Thursday? Write it down.

Now, how best to test-drive that week? Carve out a sabbatical for yourself. Combine at least two or three weeks of vacation—but don't actually travel. Rather, follow the calendar you set up. (Even better: Ask your employer for a four-week furlough, suggests Jim Heitman, a certified financial planner at Compass Financial Planning in Alta Loma, Calif. "Most employers, if you're within a year or two of retirement, are willing to do that," he says. "And if your boss tells you he can't spare you for four weeks—then ask for a raise.")

The first objective of this test: to find out whether you're really meant to retire. Are you bored after just two or three weeks of a trial run? (That's all it takes for some people.) Or does something on your experimental calendar simply need to be tweaked?

[With] retirement finances we'll assume you already have a budget on paper, which makes the test simple: Try living on that budget for four to six months. If your plan calls for a monthly income in later life that amounts to 80 percent of your current income, then limit your monthly spending to the smaller figure. If you find yourself burning through your money at a faster rate than you anticipated, then you need to revisit your retirement budget.

We test-drive a lot of things in our lives before we commit—cars, ideas, running shoes, relationships. Each assessment gives us a clearer picture of what we're seeking. Retirement has enough unknowns as it is. The more you can experience before you cross the starting line, the better.

Not a bad idea. In fact, it's a very good one IMO.

I think this is why early semi-retirement might be an option for me. It will allow me to get a taste of retirement while still keeping a foot in the working world -- a transition, if you will. Then I can see if retirement (or my version of it) is all it's cut out to be.

Think it can't be done? It can -- and earlier in life than you might think. Here's how one FMF reader took early semi-retirement when he was 40. Of course, you need a plan to get there, but it can certainly be done, and allow us all the chance to see what we'd actually do in retirement.

I'm not 100% sure what I'd do in retirement, but here are some things I'll certainly consider:

• Exercise every day (I exercise five days a week now, but I could move it up to seven, and go longer when I do.)
• Read. I haven't had time to read in years (most of my books are "read" via audio book.)
• Volunteer. I think this would take up a good amount of time. I already serve on the board of a non-profit, so I could see myself adding another board position or volunteering in another way (like at a local botanical gardens where we are members).
• Travel. We have lots of places to see and things to do nearby, so travel doesn't have to be expensive.
• Gardening. I love to putter around the yard. Many of you know that I grow roses and I've started re-making the back yard with some landscaping we had done last summer. With the time, I could grow almost whatever I wanted!!! ;-)
• Start another career. Maybe teaching college.
• Referee more. Soccer season is pretty short here compared to the rest of the US (due to the weather), but I could work more games if I had the time.

And I'm sure there are many more things I could come up with if I thought about it a bit.

I also found this comment interesting in the piece:

And don't believe the old saw that spending invariably goes down in retirement because all your work-related expenses—like business wardrobes and lunches out—suddenly fall by the wayside. In all likelihood, notes John LeBlanc, a certified financial planner with Back Bay Financial Group in Boston, those old expenses will be replaced by new ones: the cost of travel to volunteer work, entertainment, golfing and more. Says LeBlanc, "I see many of my clients not changing their spending habits in retirement, only reallocating their income resources differently."

I think my spending will maintain or perhaps go up a bit in retirement (more travel?), but then again I live on a fraction of my income so I should be ok.

BTW, when doing retirement planning/calculations, I always use spending as the measure I try to cover with my savings/investments, not income. There's a big difference between the two for me, and I hope there is for you too. ;-)

Comments

[K. Walton]

Excellent! My husband and I had a semi-retirement before completely retiring at Alden Place in Lebanon, PA 5 years later. That experience changed the way we look at retirement. Though not fully retired, we've encountered issues like budgeting and finding affordable ways for enjoyment and relaxation. We're glad we did it before retiring completely.

[Mike Hunt]

I suspect when you retire discretionary expenses go up. When working all day and brown bagging lunch the daily expenses are pretty low. I don't open my wallet at all during the work week but on the weekends it's completely opposite!

-Mike

[Georgia]

I would never have tried semi-retirement because I never intended to stop working until I could do it no longer. But, I retired in 2006 at 69 as my husband was dying and needed me home. I was able to go back to work after he died for 6 months, but with the economy the way it is, the state is having to cut back a lot.

I am highly motivated to do work I love, but I am also lazy and laidback when home. I read, exercise very little, watch DVD's on my tv, spend time on the computer and am active some in church and the OATS committees and trips. It is still not my ideal of life. I HATE retirement. It is just not filled with work I loved to do. I don't have to worry about my income at the present, so I guess I worry about these things. Yuck!!

I live in a small town 50-80 miles from larger cities. I do not want to take work, if it's available near home, from those who really need it. I do travel some to see family. Luckily I have family all over the place - IL, NH, FL, AL, TN, OK, TX, AZ, NV, CA, and WA. They all welcome me when I come. But this does not make up for sitting around home a lot and going to the coffee shop once a day for friends to talk to. With only me, I do little housework. Who is around to mess it up.

Actually, trying semi-retirement might be good for a lot of people. They might actually decide not to retire anytime soon. It is really more than the money you earn. You are busy and useful and your days are full. Also, at 74, even at my old job, it would be hard to be rehired now. Guess I'll have to go back to an old job I used to do - staying with elderly people. The only trouble is that is still mostly just sitting around. I must simply be feeling sorry for myself. Gotta stop that or I will have to put myself on the county prayer list.

[Jan]

Ah- financial planners love to tell people they do not have enough money to retire. Their income is based on yours!
Yes, if you plan on traveling around the world- your expenses will go up.
If you now have time to stop and smell the roses- they usually go down.
You will have to pay for those "business lunches". But you won't have to eat with people you do not like AND you can go when tables are available.
If you retired and are bored in three weeks- you are NORMAL.
It takes about six months to shift into a new lifestyle. After the six months are up- then life becomes exciting again if you have motivation.
We have been retired for about nine months. We are not committing to any long term volunteer things that take time in the spring or fall when we want to travel. Our budget is as expected- about 50% of what we needed when we worked. I have to admit that we prefer the public tennis courts to the private golf clubs.
It is what you make it. Two younger people moved into our jobs when we left. Why do you think college aged people are unable to find work----their parents are still filling the positions.
If your image is your job- then continue working- by all means!
Not us- you won't see us. We woodwork, bike ride, travel and read while you are at your desk or grocery shopping on Saturdays.