Retirement is something to look forward to. No more meetings, no deadlines, and plenty of free time to work on hobbies—what could be better? As it turns out, you may just find that you miss the structure and purpose of your old workday. Retired life is different from professional life, and adapting to it may require a change in both mindset and habits. It’s possible to ease into retirement with some planning and preparation, so here are some things to think about early in your career so that you’re better able to face retirement:
Paying attention to finances
Some of the anxiety around retirement can stem from the obvious lack of job-related income. You can start saving for retirement early by taking advantage of your employer’s tax-advantaged retirement accounts. There are several types of tax-advantaged accounts that can be used for retirement savings, such as 401(k)s and IRAs. These accounts offer special tax benefits that can help you to save more money for retirement. For example, 401(k) contributions are typically made with pre-tax dollars, which means they reduce your taxable income for the year. Additionally, many 401(k) plans offer employer matching contributions, which can further increase your savings.
You can also work to allay financial fears by create a sound financial plan for your retirement years, perhaps in conjunction with a financial advisor. Without a plan, it can be difficult to know how much money you need to save and how to best invest your resources. A retirement plan will likely take into account your expected retirement age, desired lifestyle, and, if possible, health status.
Developing hobbies and connections
Work defines life in ways we don’t fully understand until retirement. It lends routine and structure; it facilitates interactions with other people and helps us build friendships and meaningful relationships. The hobbies and connections you create now can help you feel fulfilled in retirement. Hobbies can be anything, from penning down that mystery novel idea you’ve had for years, to learning new skills like playing an instrument or solving sudoku puzzles. It’s also important to consider what your social circle will look like. If you plan to live in a retirement community then you may already be in proximity to other people you can build friendships with. If you’re planning to remain at home, it might help to participate in community center activities or reach out to neighbors, friends and family members.
A permanent life insurance policy such as universal life insurance or whole life insurance offers financial protection for your loved ones, which can be especially useful if you’re the breadwinner in your household. Permanent life insurance comes with a guaranteed death benefit, so you can leave a legacy. Universal life insurance and whole life insurance come with several additional benefits, including a cash value component that grows over time. You can borrow against the cash value for any reason. This can be helpful in retirement during market downturns when you don’t want to withdraw as much from your retirement accounts. It can also help you manage taxes.
The primary purpose of permanent life insurance is to provide a death benefit. Using permanent life insurance’s accumulated value to supplement retirement income will reduce the death benefit and may affect other aspects of the policy.
I did cut two sections here. This one is going to get held up if we keep it focused on financial stuff — instead of having sections on investing, add something like having a hobby, cultivating a social circle, looking forward to a routine, knowing where you want to live, etc. The health one didn’t make sense because that’s something people have much less control over (especially if we assume people reading this are early career). Seniors also get medicare after 65, so the recommendation to get personal health insurance wouldn’t work. [SB1] [SB1]