You have probably noticed a trend in our blogs, one common thread is no matter where we start retirement can be better with a little planning. Planning is key for everyone to get their 20 plus years of retirement right. I asked Gerry to share his thoughts.
Planning is Key
When I think about my journey to Victory Lap Retirement (VLR), in comparison to Mike, or other people we have met during the book tour, it is clear there are similarities in that we are leaving careers and looking for something new for the first time in a long time. What is different is how we got here, which is largely based on how we left our career and our work experience over the last few years. Let me illustrate.
I recently attended a family birthday in High Park in Toronto. It is a wonderful urban park and it was a beautiful day. I had the pleasure of sitting with a wonderful lady I will call Sue. Sue has 26 years under her belt and told me she could not see retiring as she loved going to work. I was struck by the joy she still has working. Sue still likes going to the office, meeting work friends and doing a good days work. I recall meeting lots of Sues earlier in my career, maybe life was different back then, maybe it was because I was new to the corporation, maybe I was so junior in my career, or maybe just young and naive? Who knows but it seemed to be more common to find people like that with a balanced view of life. The majority of these employees were talented and hardworking but were not focused on moving up the corporate ladder and everything that goes along with that.
As I moved up my own ladder in my career I started to meet more people that had a heavy focus on career, in the majority of cases, at the expense of many other wonderful things in life. Some of the people I met were successful if measured by advancement, others left the corp. never to be seen again. This group of people we will call “corporate climbers”. Many climbers have spent years dedicating 10+ hours a day to the corp., travelling for the corp. sometimes on weekends or at night, spending time with clients, and nights working on the computer at home. I know this lifestyle as I lived it. This commitment to work makes a good employee but can put a strain on everything else in life. Focus and time spent working takes time and mental awareness away from family, friends, and other interests. This much time and focus on career may cause climbers to have a difficult time figuring out the “why” in VLR. While many climbers have achieved financial independence fairly early in their career, they need to prepare for all those hours that used to be directed to their careers, which suddenly free up in VLR. The climbers may actually have more difficulty transitioning to VLR than Sue and her colleagues, because of the time spent at the job and this will be exasperated if their career ended, like many, unexpectedly with a “package”.
In the context of VLR planning we see two very different examples. In one case we have a happy employee earning a good income, with a good pension. Sue has interests outside work, and a supportive family, still Sue will find a large “life gap” when she leaves work. People like Sue will see a loss of routine, reduced socialization, loss of mental stimulation and as Mike’s talks about in his presentations, the loss of “the why” or the reason to get out of bed in the morning. Proper planning is needed to prepare for these changes, prevent retirement shock and give you something to get excited about in VLR.
The corporate climber group have made a major time commitment to the corporation over the course of their work life and for many this time has paid off as they moved up the corporate ladder. I should point out at this stage I am not suggesting corporate climbers can not have happy, wonderful, fulfilling lives with a successful career and happy family in spite of the long hours they spend pursuing their careers. But they should be aware that planning is still required to have a successful Victory Lap. Here is one statistic to think about, Mike’s co-author Jon Chevreau recently wrote an article for Moneysense.ca which referenced an RBC study showing retirement frees up 2000 hours of time a year for the average 40 hour a week worker. That is a lot of time, and if we conservatively use 10 extra hours a week that number jumps to 2500 hours for a corporate climber! Additionally because of their commitment to work they may have filled many of their personal needs at the office things like status, power, personal achievement, admiration, etc. This will add an additional consideration to their VLR plan. One of the retirement myths we talk about in our presentations is “retirement solves everything”, it doesn’t. Everyone needs a lifestyle plan to have a successful retirement, for some it may be straightforward, for other it will be more challenging but it will be worth it. So start planning now!