A glide path is a way to describe how an investment mix changes over time. As the investor nears retirement, the mix tends to become more conservative, with less stocks and more bonds.
It is possible to create a smooth transition into retirement by making small changes to your personal and working life over the years or months before you retire. It can be difficult to transition into retirement, especially if there aren’t ways to replace the structure, sense and purpose of work. Saundra Davis is a financial coach and executive director at Sage Financial Solutions in San Francisco.
Davis states that people are eager to leave work, but feel the pressure of “How do I define my self?” “Is it important that I’m not in the workforce ?'”
How do you envision your life?
Davis recommends that people begin to think about what they want out of retirement. This could be as simple as visualizing your ideal day. It could include visualizing where you are living, what you do, and who you spend time with. Davis suggests that free tools like YearCompass or Unravel Your Year will help you to identify what “sparks joy”, and what you desire more of in your daily life. These tools can help you reflect on the past and make plans for the future.
“What have you been calling for?” Davis wants to know what gives you energy.
You may face obstacles to your ideal retirement. These could include a lack or inability to pay for the necessary medical care, financial difficulties, or the need for help from others. She says that understanding your priorities can help you find the best ways to achieve them.
Davis states that you shouldn’t assume you have any limitations.
David John, senior policy advisor at the AARP Public Policy Institute, Washington, D.C., suggests that you discuss your retirement vision with your spouse or partner in order to “see if we’re on the same page.” John points out that your partner may have different ideas about retirement, where they live, and what to do with their free time.
John states that we tend to assume people are in agreement with us when there hasn’t been a formal discussion.
What role does work play in your retirement?
Many employers offer retirement programs that allow employees to work part-time, but retain their benefits and a salary. Some companies have no formal retirement plans, but they may be willing and able to accommodate employees who request it, especially if the employee is high-performing, says Joe Casey. Joe Casey is a Princeton, New Jersey executive coach and author of “Win the Retirement game: How to Outsmart the 9 Forces trying to Steal your Joy span>
Phased plans allow employers to find a successor while allowing employees to transition into retirement. Melissa Shaw is a wealth management advisor for financial services company TIAA in Palo Alto.
Shaw states that “they still have more freedom and can plan for the next phase.” It’s a great way to transition .”
Part-time jobs or consulting work are options for people who don’t want to retire in a phased fashion. Shaw says that this can allow them to keep their foot on the ground while creating their new life.
How can you stay connected and sharp?
Not only does loneliness affect the quality of your life, but it can also impact the quantity. According to the Centers for Disease Control and Prevention, loneliness and social isolation significantly increase someone’s chances of premature death. They are also associated with a roughly 50% higher risk of developing dementia and higher rates of anxiety, depression, and suicide.
Davis states that many people underestimate the importance of social connections through work. People may also underestimate the impact of ageing on their social networks. Davis suggests making friends from different generations to combat this trend. She suggests that volunteering and hobbies are good ways to make new friends.
Shaw says that it is also possible to make friends with retired people or find mentors. Other ways to meet potential social contacts include senior centers, Meetup, and the AARP Foundation Connect2Affect. Shaw describes Shaw as a client who connected with a group at a gym with retired people before he retired. This allowed Shaw to combine his desire for staying active and healthy with an informal support network.
Shaw states that it is very valuable to have other people around who have been through retirement, who can offer support, tips and share their ideas.
This article was written and published originally by The Associated Press by NerdWallet.