The Transition Into Retirement

By Anne Werum Lambright
Executive Director, WV Consolidated Public Retirement Board

 

 

Many employees see retirement as a sudden trade of full-time work for full-time leisure and don’t really plan for activities other than leisure during retirement.  Studies show that successful retirements begin long before the employee walks out the door for the last time.  Successful retirements have a firm basis of financial preparation but, also show evidence of gearing down work activity and gearing up in the activities that will fully kick in once retirement has arrived.

Retiring employees should be educated about the importance of having interests that they are retiring to, not just a job that they are retiring from.  All of us need to have some sense of meaning and purpose in our lives.  Most of us with full-time jobs find that much of our identity is wrapped up in our work even if we don’t actually like our jobs, or work environment or bosses.  Retiring removes what is often a key part of our sense of purpose and identity.  Downshifting from our work while upshifting into new activities that interest us can turn retirement into a painless short hop.

The other matter that retiring employees should consider is having a financial planning dialogue with family members.  They may not have asked directly but they are probably concerned about your financial situation as you transition into retirement.  Don’t give them any details that you want to keep private but talk to them about your plans.  If you expect to work part-time after retiring from your current employment or expect to do some consulting, share this information with them.  That may not be your family members’ ideas on retirement but they will accept it if you make it clear that is how you want to transition to full retirement or that economic necessity requires you to continue to work.

A large issue for you to consider and perhaps share with your family are your arrangements for health care in your retirement.  For example, many retirees and near-retirees who rely on their employers’ health insurance are now worried about losing that coverage.  For those of you with PEIA, retiree coverage is in discussion and the costs of retiree medical coverage are likely to increase.  This is also the time to consider long-term care and whether or not to purchase long-term care insurance.  If you do decide to purchase this insurance, you might consider telling your family members what are the limits of coverage and what are the circumstances under which the policy will be activated.  You should tell them whether you would prefer to remain in your own home, move to a nursing facility or move in with a child or sibling.

If you haven't completed your advanced health care directives or medical power of attorney forms, you should do so.  You may want to discuss with your family members where you keep those documents and explain your end-of-life choices.  You should make sure everyone understands your directives so that they are better prepared to make difficult decisions should the need arise.  This may also be the time to discuss with your adult children any estate plans you have in place.  How much detail you are comfortable sharing depends on your family dynamics, but the more information your adult children have, the easier it will be for them to step in later to manage your finances and your health care needs if you are no longer able.

Successful retirements usually need a lot of planning and investigation before retirement.  The transition period can be as long or as short as you chose (or as circumstances dictate) but to avoid unwelcome surprises, try to spend some time finding interests that you can retire to enjoy.  Look at your financial and health care situation and perhaps discuss both with your family.  Most of all, remember that it is your retirement not your friend’s or son’s or daughter’s retirement, so the decisions about what to do and what not to do are up to you.