Whether it’s dieting or quitting smoking, the initial thought to breaking an unhealthy habit is to quit it overnight. For many, this approach can lead to failure or reverting back to old ways, because habits are tied to routine.
When we’re used to doing something for years, it’s easy to fall back into familiar patterns when things get hard.
Success is normally found when we ease into our new normal. For example, with dieting, it might mean gradually incorporating exercise into your routine and improving eating habits over time. For quitting smoking, it could mean reducing from three cigarettes a day to one, and on from there.
The same can be said for retiring. As I travel and meet with financial professionals, I hear the same question from their clients: How do I transition into retirement?
The word “retirement” can feel daunting, especially for those who believe that their identity or purpose is tied to their work. They may be approaching retirement wondering: What will I do with all that free time? Who am I without work? What gives me purpose?
These are common questions that people face as they enter this new phase. But what if there were a way to ease into retirement instead of diving in cold turkey?
That’s where the idea of a retirement test run comes in.
What Is a Retirement Test Run?
A retirement test run is a trial period, giving someone the opportunity to experience the lifestyle change on a short-term or part-time basis.
If a company is open to it, someone might start by working three days a week in the years leading up to full retirement. This way, they are still engaged professionally, are socially connected and are earning some income. After a few months, the “retiree” can reassess, maybe reduce further to two days a week or stick around as a consultant. Or perhaps they might realize that they prefer more structure and increase closer to full time.
This gradual approach helps near-retirees navigate the next phase of life with more confidence.
Another option for a retirement test run is taking a sabbatical or, if someone has enough vacation time, trying a mini-sabbatical by taking a month off. This gives them a chance to simulate retirement and see what the new normal might look and feel like.
Both approaches help people assess what about retirement works for them and what doesn’t. Were they bored, or did they find fulfillment in new ways, such as through volunteering, caregiving or spending more time with loved ones? They can also better understand the financial reality of retirement. Maybe they will end their test run experience with the realization that they still need a source of income to fund their desired lifestyle.
How to Help Clients Navigate a Retirement Test Run
If you have a client interested in testing out retirement, you will play a vital role in the process. Work with clients to develop a budget and evaluate their spending during non-working periods. Consider their health care needs and how those will be funded. Work with tax and legal professionals to create a plan based on the client’s distinct circumstances. If someone isn’t quite ready financially for a full sabbatical, continuing to work a few days a week might allow them to experience aspects of retirement while still saving for the future.
The non-financial aspects of retirement are also important to discuss and are arguably harder to prepare for. The idea of freedom is appealing, but for many, once they get into it, they don’t know how to fill those hours.
A family member recently told me that he loves golf but couldn’t do it every day. You can help by sharing stories of clients who have fully retired, those who eased into it and those who ultimately returned to work after retiring. Maybe they found joy in volunteering, getting more involved in their community or joining a board. Passion projects like those can replace the sense of mattering and productivity previously found in work, and figuring that out early can be a game changer when it comes to long-term happiness.
The key is to help clients find what gives them a purpose in this new chapter — which could last 20-30 years depending on their retirement date.
Test-driving retirement gives people a chance to evaluate the experience before making a full commitment. Change is hard, and habits built over more than 30 years are not easy to break. Consider how a retirement test drive can set your clients up for success.
Mike Lynch is managing director of applied insights at Hartford Funds.
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