January 21, 2008

As Workers 50 and older enter what they consider to be the final years of their career before retirement, many have not thought beyond making sure they have saved some money.

But that, says one financial planner, is a mistake.

"People focus so much on the money aspect of retirement, they forget the rest of it," says Kelly Campbell, a certified financial planner in Fairfax, Va. "They never stop to consider what they actually want to do when they leave their jobs."

The result, he says, is that many retirees find after a couple of months of being away from work that they are at loose ends — they discover they're not really satisfied with their lives.

"In the last two years, I've had more and more people tell me that they haven't even thought about what they're going to do after they retire. I ask them: "What would make you excited to get out of bed every morning?"'

For some, it means playing more golf, traveling, doing some consulting work — or even starting a business.

"People need to understand that they should not be retiring from something, but to something," Campbell says. "They need to think about what they really want to do."

For example, Campbell says one retiree told him she didn't really want to quit working completely, and had always wanted to start a business, preferably a deli or doughnut shop on the beach.

"So, we started going into details about what she needed to do to make that happen," he says.

Campbell says that many older workers use the 80/20 rule, with 80 percent of their focus on the financial numbers, and "20 percent on the touchy-feely stuff."
"I think it should be just the reverse," he says. "I think they should spend 80 percent of the time living the life they want, and 20 percent focused on the numbers — which is what they can do with some planning."

Campbell suggests that people first think about the realities of what their lives will be like after retirement, and then figure out how much money they need. For example, a retirement devoted to charitable community works and playing with the grandkids will not require as much cash flow as a person seeking worldwide travels. Of course, health and lifestyle will figure into that equation, he says.

Campbell, CEO of Campbell Wealth Management, says workers considering retirement also should consider:

Creating a top 100 list. "Sit down and spend a couple of hours listing 100 things you want to do before you die," he says. "People often forget about what's important to them and they've been focused on their careers for so long that when they retire, they have no preset goals."

Asking questions. Begin by answering this: "If you could retire, would you?" This will help you determine if you might be happier continuing your job in a part-time role, as a consultant, or starting another career.

Setting a date. By selecting a specific end employment date, you can begin to work toward easing out of your current position and setting up your life after retirement.