Planning for retirement isn't all about money

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One of the biggest mistakes that people make when planning for retirement is underestimating how big a life event it is.

Typically they’re so focussed on the financial side of retiring — ensuring they have enough money to fund the lifestyle they want — that they don’t give enough consideration to emotional, social and other important aspects.

For most of us, whether we realise it or not, work is an integral part of our sense of identity and self-worth. It also provides us with stimulating company and social interaction. When, suddenly, work stops, some retirees struggle to come to terms with their new existence.

Of course, making sure you have enough money to retire, and that you don’t spend it too quickly, are important functions of a financial planner. But there are other, non-financial matters that a good planner can help you with in the run-up to retirement.

Barry LaValley is a specialist in retirement planning, based near Vancouver. Robin Powell recently caught up with him on a recent visit to England. In this video, Barry explains exactly how a planner can help you to get more out of life beyond the world of work.

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Video transcript: 

In the run-up to retirement, people often say they want to try new things and get the most of out of life.

But there’s something that psychologists call continuity theory, which often stops that happening. 

To put it simply, we instinctively prefer to stay as we are. 

Retirement expert Barry LaValley says a good financial planner can help you to match words with action.

Barry says: “My view on it is, you do as much as you can as quickly as you can, and hope you can do it for thirty years. I believe life is meant to lived. Now that doesn’t mean that, in the first years of you being in control of this life, that you take all your financial resources and squander them. Because one of the big fears — and justifiably so — is you might outlive your money. 

“At the same time, you don’t want to be a prisoner to anything, particularly your financial resources. So, figure out what you’ve got — my grandmother used to call it cutting your coat by your cloth, you’ve got to figure out how much cloth you have — and then just go and live life to its fullest. Because, you see, life will change and there will come a point — may come a point — when you can’t live the life that you want. And in the meantime, I don’t want you to enter that period of life going: ‘Darn, I wished I had.’”

What, then, are the main contributors to a fulfilled retirement? Barry suggests there are five important ones. 

Barry LaValley says: “I think we should focus on what positive psychology actually tells us that happiness is, based on our responses internally to the world that we live in. And there’s five conditions that people should be aware of, each one of these contributes to happiness, and they are: one — that you should have positive engagement in life, you should really feel like you’re outlook and everything is going to be as optimistic as you can make it. So, positive energy. 

“The second is going to be your engagement in life itself: feeling that life has purpose, feeling that there’s a reason for you to get out of bed. The third one is your relationships: you know, we get more from our relationships than anything else that we do, as it relates to healthy ageing. The fourth one is meaningful activities: doing things that are important, things that make us feel relevant, make us feel like we have value. And then the fifth one is achievement: we need achievements, we need them each and every day.”

So, when planning your retirement, those are the five key things you should focus on.

No, none of them has very much at all to do with money. But they are all issues that a good financial planner can help you with.