Are you ready for retirement?
Are you ready for retirement? Dan Richards posted an article on Clientinsights.ca on July 6, 2010, “Fifteen retirement readiness tasks for clients”. The title is self-explanatory, however I want to go into the key findings of this report, which was issued in May by Met Life. The study subjects were Americans and it attempts to measure where they stand in terms of preparation for retirement. Although the study was done on Americans, I think the applications can be applied to Canadians. This is a particularly useful exercise because your decisions could affect you for decades especially with longer life expectancy. In Managing Post-Retirement Risks- A Guide to Retirement Planning, the Society of Actuaries points out the financial risks surrounding retirement have increased dramatically. They list extensive sources of risk including risks related to longevity, inflation, interest rate fluctuations, stock market volatility, business performance, employment conditions and changes in public policy.
Met Life research demonstrates that a successful transition into retirement involves personal, career, and financial preparation that involves 15 specific developmental tasks while still in your working career. While the completion of these tasks has no guarantees attached to them and is meant to indicate whether you are “ready” to retire, completing these tasks will reduce the risk of your transition and dissatisfaction in retirement. Retirees have provided potential retirees with a roadmap of decisions and actions you should address before taking the plunge into this new stage of life. Your level of task completion will vary with your age, number of years to anticipated retirement and retirement status. The study result also shows where people typically are at along the road to retirement but doesn’t give concrete answers as to what tasks should be completed at what ages.
The 15 readiness tasks analyzed in this study can be classified into the following 5 themes: work, leisure and activity, relationships, income and benefits and planning. In terms of work you will need to decide what retirement means to you. Do you fully retire or do you work part-time and what are the options, skills and opportunities in retirement? Leisure and activity related tasks refer to identifying your personal interests and goals. Relationships with your spouse, family and friends, along with your working life relationships are covered. Most people associate their readiness with their income needs and resources to support that. Going beyond that to assess whether it is financially feasible, you will want to evaluate the impact of a changing economic environment on your financial resources. Lastly planning involves looking at different scenarios if you choose to change or are forced to change any variables such as travel for a period of time, how health or financial setbacks may affect you and evaluating whether you can meet these challenges.
Some of the key findings of this study show that completing these tasks is an important bridge to the retirement transition, decisions about working and benefits are top-of-mind, task completion is related to age and years until retirement, progress of retirement savings and contingency plans lag and it takes goals and action to get there.
Met Life research demonstrates that a successful transition into retirement involves personal, career, and financial preparation that involves 15 specific developmental tasks while still in your working career. While the completion of these tasks has no guarantees attached to them and is meant to indicate whether you are “ready” to retire, completing these tasks will reduce the risk of your transition and dissatisfaction in retirement. Retirees have provided potential retirees with a roadmap of decisions and actions you should address before taking the plunge into this new stage of life. Your level of task completion will vary with your age, number of years to anticipated retirement and retirement status. The study result also shows where people typically are at along the road to retirement but doesn’t give concrete answers as to what tasks should be completed at what ages.
The 15 readiness tasks analyzed in this study can be classified into the following 5 themes: work, leisure and activity, relationships, income and benefits and planning. In terms of work you will need to decide what retirement means to you. Do you fully retire or do you work part-time and what are the options, skills and opportunities in retirement? Leisure and activity related tasks refer to identifying your personal interests and goals. Relationships with your spouse, family and friends, along with your working life relationships are covered. Most people associate their readiness with their income needs and resources to support that. Going beyond that to assess whether it is financially feasible, you will want to evaluate the impact of a changing economic environment on your financial resources. Lastly planning involves looking at different scenarios if you choose to change or are forced to change any variables such as travel for a period of time, how health or financial setbacks may affect you and evaluating whether you can meet these challenges.
Some of the key findings of this study show that completing these tasks is an important bridge to the retirement transition, decisions about working and benefits are top-of-mind, task completion is related to age and years until retirement, progress of retirement savings and contingency plans lag and it takes goals and action to get there.
posted by David Allard at
9:37 AM
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