Gold Medal Waters is pleased to offer events that focus on issues important to our clients that go beyond financial matters. At a recent gathering, the founder of the Retirement Lifestyle Center, Barry LaValley, held everyone’s attention in a packed room as he presented thought-provoking and insightful information about retiring “successfully”.
Mr. LaValley combined theories from psychology and behavioral finance with studies and observations about the realities of retirement, and anecdotes from his many years of experience in this arena. We extracted "10 Key Takeaways" from the event to share here, along with some audio clips of the presentation. For those who were unable to attend, or for attendees who want to review and share more of these insights, click here to view the presentation.
He began by noting that, in previous generations, at age 65 you were “old” and retirement rarely lasted more than five years, 10 at most. Today, retirement could be the longest phase of your life. With that in mind, here are our 10 key takeaways:
1) Continuity Theory explains that our prejudices and biases become more entrenched as we get older. This makes it difficult for retirees to get out and do new things.
As we age, many people make the mistake of allowing Continuity Theory take over their lives. A man on the verge of retiring thinks, “Now I will be able to golf every day.” When he golfed every day for a year or so and is asked why he does this, he says, “Because it kills six hours a day”. The moral of the story: we tend to do the same things over and over. To have a truly enjoyable retirement, we need to fight this tendency.
2) Confirmation bias, exhibited by almost everyone, means we avoid exposing ourselves to things that go against what we believe. This tendency becomes more pronounced as we age and affects what we are open to doing in retirement. If you think you’ll become a different person after you retire, that you’ll be willing to try things you’ve never done before, even though you haven’t behaved that way in the past, think again. In retirement, you’ve got time, but you’ve still got you.
3) Are you self-directed or other-directed? Self-directed people believe they are responsible for their own happiness and have control over what they think. Other-directed people blame external things for their situations. Their moods are greatly affected by what they see, read and hear, and by what others say. Most people say they’re self-directed, but roughly 90% of adults are at least partly, or even mostly “other-directed”. Other-directed people often fall into trap of “I’m too old to do that.”
4) Defining retirement. The concept of retirement is not a function of whether you’re working or not. It’s a function of whether or not you are in control of your time.
You can choose to view retirement as a time of personal enlightenment, where you can live the life that you want, on purpose. Most retirees do not achieve this perspective, but those who are able to are people who truly enjoy their retirement. (#7, 16:08 – 16:40).
Retirement shouldn’t be seen as a 30-year weekend. There is a direct correlation between working at something you like and how long you live. Being at leisure all of the time increases your risk of diabetes, heart disease, dementia. Every year you work beyond age 60 decreases your risk of dementia. “Use it or lose it,” so plan to do something with your mind.
5) Opportunity, Possibility and Attitude. When you think about retirement, ask yourself “am I looking forward to the future or do I fear it?” There are challenges, but try to roll with the punches. There’s always a light at the end of the tunnel.
6) PERMA: What makes people happy in retirement. The PERMA acronym stands for Positive emotions; Engagement in Life (resisting the feeling that retirement means we are no longer useful); Relationships – the most important factor as far as healthy aging is concerned;
Meaningful and fulfilling activities - we’re not meant for perpetual leisure (see #4), and Achievement. We need to feel like we’re accomplishing something. The definition of achievement changes in retirement – it’s up to you to define it.
7) Stress and the Hearty Personality – Stress produces cortisol, which causes many serious physical problems. Hormones (such as dopamine) that counter cortisol come from “positive stress”.
Four things you can do to ward off negative stress in retirement: (1) Know that you can control how you view things in life (2) Continue to challenge yourself, to see new places, try new things, (3) Be committed to living each day to its fullest (4) Stay connected to family, friends and community.
8) Three kinds of relationships in retirement – (1) Your Social Network – The aging process is often lonely. You have to push yourself to be open to building new relationships (wives often take the lead on this). Consider living in a retirement community where it is easier to build new relationships. Look into MeetUp to find activities you enjoy in your community that give you a chance to be involved with others.
(2) Your Family – as we age, our families (seem to) become more dysfunctional, but they can be the biggest source of satisfaction as you age; (3) Your Spouse or Significant Other – retirement can be hard on a couple! Few couples can be successfully joined at the hip, and you shouldn’t expect to be one of them. It’s good for both people to have their own activities and their own goals. Don’t assume your goals match your spouse’s.
What about being single? Single people who are self-directed do far better than those who are other-directed.
9) The Paradox of Leisure – When you’re working, you look forward to weekends & holidays because they are a break from what we do most of the time. When you’re retired, where is your break from leisure? Successful retirees use work as that break, but “work” takes on a new definition.
10) Consider this. If you knew you only had two years to live, how would that change how you live your life today? You can make the time you have go by more slowly by stopping to smell the roses. Enjoy the moment. The truth is, we’re all dying. Get the most from the opportunity you have now to live the life you want.
Gold Medal Waters is a fee only financial planner located in Boulder, Colorado that specializes in serving the unique needs of physicians and high net worth clients. Coordinating a great financial plan isn’t easy. Learn more about what sets us apart, or talk to an advisor and get a free meeting to see if we are the right firm for you.