Finding Your Purpose In Retirement

When discussing financial planning with clients, retirement is almost always one of, if not THE one financial goal on the table. But when we look beyond the plan to execution, while some people retire with joy and excitement focused on delayed hobbies and pursuits, many others find themselves underwhelmed, disappointed and, in a startling number of situations, clinically depressed. In fact, 28% of retirees are depressed, a number that’s significantly higher than the overall population.

So why does this Holy Grail of planning end up so negative, so often? Studies cite several reasons including:

• Loss of work: For many people, work goes beyond a job; it is a career or sometimes even a calling. How often does cocktail party conversation focus on what we do versus what (or who) we love? When we tell people who we are, how frequently do we lead with our role rather than our soul? Simply put, for many people, maybe even most people, their vocation is intertwined with their identity. Losing one’s identity can be a difficult emotional transition.
• Loneliness: For many people, work is where they have their closest friendships. While there are generally good intentions to continue relationships after retirement, when the consistency of interaction and the connection of common purpose fade, those friendships fade as well leading to a sense of isolation and loneliness.
• Loss of economic reliability: Most people become used to the financial habits and behaviors associated with a consistent paycheck. When that reliable income stream disappears, new processes and habits oftentimes create financial anxiety.

Retirement planning is more than dollars and cents. Successful financial planning requires aligning your resources with your purpose. A statement of financial purpose is the cornerstone of giving meaning to your money. So, how do you create this critical document?

Start with Deep Introspection

Identify your “driving emotion.” What positive emotion drives your behaviors? Is it happiness, fulfillment, success, impact or something else? For example, if your driving emotion is fulfillment, your statement of financial purpose might look like this:

• I want to be fulfilled.
• Fulfillment to me means….
• I am most fulfilled when I spend my time, energy and money on the following…

This document then becomes your north star, your economic constitution, and your personal manifesto. It is the benchmark for leading your best life.

Retiring to Your Purpose

For many people, retirement isn’t as fulfilling as they hoped. A 2023 survey, 22% of retirees said that retirement was worse than expected. While we cannot be sure why that is, it is safe to assume that for many people, it involves a loss of purpose without a compelling new one to replace it.

Routine provides momentum. Waking up every day at 6, grabbing coffee, getting ready, driving to work and “running your calendar” means you never have to worry about what to do next. But routine is not the same as purpose. Purpose involves a deeper connection to something meaningful, not just the next task.

Those who struggle in retirement often mistake routine was purpose. When the routine is gone, they find it hard to discover true purpose.

However, those who thrive in retirement, replace routine with a new sense of purpose. If their vocation provided true meaning, they find a way to stay engaged. This new purpose helps them answer questions like: Who am I? What do I want? How can I use my new resources (more time, maybe even more money) to life my best life?

To get started, consider these options to help find your purpose:

• Part-time work: Stay engaged and supplement income.
• Start a business: Older entrepreneurs often succeed.
• Volunteer: Contribute your time to causes you care about.
• Learn something new: Pursue new interests.
• Be social: Maintain an active social life.
• Get physical: Stay active for health and well-being.

Bottom line

Successful retirements require a financial plan that allows your money to work for you, even when you’re no longer working. While financial preparedness is critical to retirement, it’s not enough on its own. Many unhappy retirees have plenty of money, but lack a new, exciting and compelling purpose. The key to success is the combination of resources and purpose.

If you need expert guidance to build a purposeful plan, connect with one of our wealth advisors. They can help you discover what truly matters to you in retirement and then figure out how to make it happen.