Planning for the Next Phase of Your Life Begins With a Vision

  • Andy Frye
  • 3/8/2016

This article was originally published on May 31, 2013. It was updated to include the video above, which was created to help you begin thinking about what’s next as you near retirement and pursue the next phase with passion

Nearly 10,000 Baby Boomers turn 65 every day, a trend that the Pew Research Center says will continue for the next 20 years. By 2030, a full 18 percent of Americans will be at retirement age. Watch our video to begin thinking about how you might discover what’s next and pursue it with passion.

Some Boomers are wondering if they can afford to leave the workforce; others are confident they have all the financial resources they need. But money is only part of the story. For members of both groups, the first step in achieving independence from a career or business is deciding what they want the years after retirement to look like. Developing a vision for the future before addressing finances can lead down a more rewarding path.

The way we were

The traditional view of aging in America has men and women working until they are in their early to mid-60s, then walking away from it all and beginning a life of leisure and freedom. But for some, reality can be quite different. Retirees often experience depression as they transition from business ownership or a successful career because their work defines a big part of who they are. It doesn’t matter that they have plenty of money; many are at a loss to decide who they want to become and what they want to do with the rest of their lives.

Longer life expectancies are also challenging Boomers to paint a new picture of their golden years. In fact, it is common to hear men and women in their late 50s and early 60s say that they are not ready to leave work. This may not be out of necessity; it is often because they chose to continue working. Just “finding something to keep busy” won’t do for those who have always been goal-oriented and purposeful.

Choosing a path with a purpose

In order to help our clients start preparing for the next chapter of their lives, we encourage them to make a list of 10 things they want to accomplish or achieve in their life. These items do not necessarily have to be monetary; they can be anything from setting up a nonprofit or foundation, to learning a language, taking up golf or hunting, beginning to knit or sew, or traveling.

If you have a partner, he/she should make a separate list. After both are complete, create a third line-up of goals you would like to reach together. When that’s done, share your individual ideas and see where they are similar. The exercise is designed to get you thinking about dreams that you have put off because of time constraints or other factors.

It’s one thing to talk about what you would like to do in retirement and another to write it down and hold yourself accountable. And there is always satisfaction in knowing that you have accomplished what you set out to do. Creating lists helps you build a framework for how you want to spend your time and ensures that your values align accordingly. The lists also provide guidance as you identify your desired spending needs in retirement. Clearly, traveling to Africa or Europe, or studying pottery in China will take more resources than learning a language or golf. Knowing your projected spending ahead of time allows you to prepare for the retirement you want and to make the necessary changes before it is too late.

Of course, you’re not going to be able to hit all of the curve balls that life throws at you, so it’s best to keep your vision flexible. At some point your health or other factors may come into play, diverting you from your original course. Be willing to make adjustments, and seek advice to help make sure you’re on the right track.  

What to do about the business

By the time you leave full-time employment, you will have spent 40-plus years establishing a working legacy. Developing a vision for the post-career years won’t take nearly as long, but it’s going to take more than a few hours or even a few days. We’re talking about the rest of your life, so thoughtfully weighing options is vital to drawing the right conclusions.

When you begin the process, give yourself (and your partner) time to think about your future. This is especially true if you are a business owner. In Dancing in the End Zone: The Business Owner’s Exit Planning Playbook, author Patrick Ungashick estimates that about 9 million of America’s 15 million business owners were born in or before 1964. That means millions will soon be in a position to transfer business ownership. Unfortunately, Peter Christman, founder of the Exit Planning Institute, estimates that about 75 percent of business owners don’t have an exit plan.

Business owners will have additional questions to consider regarding the transition of a business such as:

  • Sell it to family members, or a third party
  • Gift outright to family members
  • Create a plan that combines a sale and gift

If you are contemplating a transition to family members, you should consider utilizing a trust. It is important that you consider the permanency and income tax implications of different types of trusts for yourself and the beneficiaries. Understanding the cash flow from each of these options is critical, in addition to making a decision on how you will or will not stay involved in the business. You could remain the majority owner, but turn day-to-day operations over to a management team. Maybe you will work part time or as a consultant. These types of arrangements are a compromise between involvement and income, but may be the best route for you to achieve your goals.

Looking forward with confidence

Whether your idea of retirement includes working, volunteering, traveling, or some other activity, it will require a shift in the balance in your current life. Articulating your own unique vision is the first step forward. Once you have established a road map and understand the kind of lifestyle you want to retire to, you can build a financial plan that aligns with your retirement dreams.