Peri-Retirement—Prepare For A Rewarding Life, During And After Work

The holiday season is a time of active reflection, from taking stock of life’s priorities to retirement planning and the many benefits time affluence can bring. Yet the active, secure retirement on display in today’s financial planning ads does not reflect the reality of many aging workers. In fact, a recent survey shows working people fear retiring more than they fear death or divorce!

For many, their fears are understandable. Much of our identity, purpose, friendships and financial wellbeing are directly connected to our jobs. And the thought of losing them is alarming. Many people are also concerned about cognitive decline, health issues, reduced mobility and even isolation as they retire and age.

So how can aging workers ensure they enjoy a fulfilling and healthy retirement? Essentially, it involves extensive planning in the ‘peri-retirement’ period. This phase, which begins five to ten years prior to actual retirement, is crucial to help those about to retire to properly prepare themselves for a life without their full-time paychecks, colleagues, and institutional day-to-day routine.

Plan With Purpose

Research shows that lack of retirement planning is among the major barriers to a successful retirement, yet many pre-retirees do not fully recognize the depth and breadth of planning required for life after work. Retirement planning is not just about ensuring the money keeps flowing. When planning for a healthy retirement, pre-retirees must consider five pillars of retirement health:

• Social health , including cultivating a sense of purpose and prioritizing family, friends and community
• Physical health , including exercise and managing evolving chronic conditions
• Mental health , including maintaining emotional health as well as reducing stress and anxiety
• Cognitive health , and
• Financial health

The above examples of the five pillars are by no means exhaustive, but provide an indication of just how much planning is required across a range of areas during the last years of full-time work. A ‘cramming for finals’ approach in the last months of employment will not do. Instead, important thinking, family and workplace discussions, and planning and preparation for retirement all take time.

Key details require special consideration during the peri-retirement period. They include advanced care plans and decision-making around ‘do not resuscitate’ orders and powers of attorney to appoint someone to make health-related decisions on one’s behalf if required over time. These decisions take considerable thought and may need to be made in consultation with family members, healthcare professionals, lawyers and faith leaders.

For retirees, health really is wealth. According to a CNBC survey, more retirees say declining health or illness is their biggest worry (31%) , greater than health care costs (16%) and running out of money (14%).

Connect with Community

It’s particularly important to note the role that social health has in a rewarding retirement. The 80-plus-year Harvard Study of Adult Development reveals that strong relationships keep people happier and healthier. “ Loneliness kills,” says the study’s director , Dr. Robert Waldinger. “It turns out that people who are more socially connected to family, to friends, to community, are happier, they’re physically healthier, and they live longer than people who are less well connected.”

Further, people who were the most satisfied in their relationships at age 50 were the healthiest at age 80. That has implications for pre-retirees and retirees alike. Many people obtain their social connection from work. But in retirement, that social connection often proves fleeting. I recently met with a friend who had retired from an executive position at a large bank. Her email attempts to connect with former colleagues went weeks or more without reply. Face-to-face get-togethers that used to happen quickly now took months.

The harsh reality is that business connections and former colleagues can quickly move on. So it’s up to retirees to enhance their ‘social fitness’ by investing in new ways of growing their social circles in the years leading up to and during retirement, and leveraging the science of connection as a means to live a psychologically rich and purposeful new chapter. This could be through part-time work, volunteering, religious or spiritual groups, hobbies and activities, or deeper connections with family and friends. Further, for older adults, the quality of social relationships is more important than quantity.

Lean On Employers

Companies that provide ongoing benefits and health and wellness supports to retirees have a financial stake in keeping their retirees physically, mentally, socially and financially healthy. To achieve these goals, employers may offer counsel to their employees across all pillars of health in the peri-retirement period. Further, many organizations remain an important source of support, information and connection to retirees. Companies like CIBC, a global bank, even provide newsletters and events to keep alumni connected, and may use this platform to engage retirees on ways to improve and maintain their health. For example, see the feature ‘ Bone health as we age ’ in a recent CIBC Retiree News edition.

Another key question to consider during peri-retirement is whether retirees completely retire. Peri-retirees often have interest in continued work as consultants, part-time contributors, or board members. Both employers and employees stand to benefit from such arrangements. Partial and boomerang retirees offer employers strong institutional knowledge, specific and valuable skillsets, existing personal relationships, and support for knowledge transfer to the next generation of the workforce. Individual benefits include ongoing paychecks, social connections, mental stimulation, a stronger sense of purpose and a longer off-ramp to plan for full retirement.

Indeed, bridge employment or phased retirement programs have been associated with better mental health of retirees . But proposing and landing an appropriate consulting gig, part-time role or board seat does not happen overnight, and timing can be difficult to perfectly align. Again, advanced planning during peri-retirement is key to maximize positive outcomes.

Make The Most Of Peri-Retirement

Arguably, peri-retirement is more important now than for earlier generations. Inflation is rampant, we are experiencing historically high levels of anxiety, and our retirees are living longer while North America itself is aging. For couples who are 65 today, there is a 50% chance at least one of them will reach 90 and enjoy three or more decades of retirement.

In the context of today’s longevity, planning in the peri-retirement phase across the five pillars of health provides impressive ROI. This includes a longer and happier retirement, with the freedom to live life to its fullest—and enjoying the long-term, ‘healthy’ and growing dividends that lay ahead.

For those approaching or in the peri-retirement phase, invest in meaningful conversations today to help make the most of your next chapter.

By Dr. Talia Varley, Contributor