Revisiting a recipe for a happy retirement

Trading in the desert

Time out in the boonies, in our case the wonderful eastern Sierras, almost forces you into a reflective mood. Yesterday was one of those days where the amazing beauty of a spectacular hike (see my wife’s post and pics here) got me thinking about what is needed for a happy retirement. Well, I should say rethinking because early on in the blog I posted on this exact subject. I thought today, being more than 2 years on from that post, I would revisit my proposed recipe and see what’s changed.

I have to say that not much has changed to my recipe so I’ll reproduce it here and add my new/revised thoughts from the last 2 years. I have put the my new observations in italics. Here we go…

I’ve come up with four areas that I think every retiree needs to think about and have a plan for;

1. Financial – this one is the most obvious. You can’t retire unless you have the financial means to do so. It may just be social security, or a pension. It could be 100% savings. What I think is important is to have a plan that you can mark your progress against. And more importantly a plan that is flexible, that takes account some big what-ifs. This is one major reason I think retirees get ‘scared’ back into the workforce and in the worst case have no choice but going back to work. This is one of the major reasons I started this blog – to help people with this part of their retirement.

I now recommend that that ‘plan’ I mentioned should be the IVY timing portfolio or timing the Permanent Portfolio for the majority of retirees (see my latest post on the subject here). The standard retirement models, e.g. 60/40 stocks bonds, are not the best solution in particular during retirement when you’re in withdrawal mode, not wealth building mode, and capital preservation is key. For those so inclined I think its possible to do even better with a dividend/income approach I outline here, although right now I outright trade equities versus options.

2. Social – work provides a lot of the social interactions we have in our lives. Many people’s friends are made through the workplace. When you retire you lose this unless you retire at the same time as your friends and in the same area. If you retire early most of your friends are still working. Without these social connections you can easily get bored, lonely, etc… Faced with a loss of these social connections you need to actively work at this in retirement. Do you join a social club? a golf club? volunteer for certain organizations? How are you going to fulfill this part of your life? This was a huge loss for my grandfather who was the social center of his small immigrant community. He has not been the same since. In our full-time RV lifestyle this has been our biggest challenge. We’re still working on it.

Well, all I can say is challenge conquered! Full-time RV’ing has turned out to be maybe the most social thing we have ever done. Our social life is a lot more full than it ever was while we were both working. And because of this new found socialness we are enjoying our lives even more. Many of our new connections have come from Nina’s RV blog, our volunteer experiences, serendipitous meetings at campgrounds, and even social media. So, I would even put more emphasis on the importance of having social connections in retirement. Not too long ago Nina posted about this unexpected surprise for us.

3. Mental – work usually provides much of the mental/intellectual stimulation we get in our daily lives. What do you do when this goes away? Do you have a hobby to keep your mind active? Just relaxing, watching TV or surfing the internet is probably not going to be enough. Even if your work was very physical, and not mental, what do you do as you age and your ability to engage in physical activities goes away? Often this can be combined with #2. There are many ways to fulfill this need like volunteering and in today’s tech world many remote possibilities enabled by the internet. For me, my interest in investing fulfills this role. And I try to parlay this intellectual interest into helping me with my social and financial areas. On-line forums, blogs, social networks all help in this regard. I have seen many retirees struggle in this area. They find it hard to engage in new areas. It takes courage to leap into new things and a lot of experimentation.

Only a couple of things I would add here. As an astute blog reader pointed out in my first post, sometimes you need to de-program before you can start enjoying retirement. Societal programming is a very powerful force and sometimes you need time to adapt to a slower more leisurely pace of life. Then you can start taking up new hobbies, or old ones, to keep that old nogging rocking. Investing still fulfills this role for me, even more so than 2 years ago. One thing that helped me was to go completely cold turkey from TV news, talking heads, etc…and that goes for most financial news media especially CNBC. Unlug, you’ll be happier. Surprisingly, technology has helped me stay informed, yet unplugged. My iPad, blogs, and twitter have been a huge boon in this regard.

4. Physical/Health – I think being physically active helps in all areas of life but it certainly does impact your health. Also, in this age of expensive health care and insurance it is a key aspect of retirement especially as one ages. The healthier you are the less financial impact it will have on your retirement. The healthier you are the more you can do in retirement. So, I think its critical to have at least one physical activity/hobby that you love and engage in all the time. For my wife and I, its is hiking. We hike/walk 3-6 miles a day with our dog, without fail. We also are active in yoga, we run a bit, and do some strength training. Nutrition is a also big part of this for us.

No changed here except maybe I think its even more important than I first thought. I would also add to beware of conventional wisdom in particular standard medical, pharmaceutical treatments and nutritional advice. My wife and I are happy and healthier than ever following primal/paleo lifestyle for the last 4 years.

Retirement is not unlike any major transition in life. It takes time, patience, flexibility, and a little bit of effort. Pour all ingredients into a bowl, add an optimistic bright frame of mind and you have yourself a recipe for a happy and fulfilling retirement.