Ask Before Quitting

As we approach retirement, we often find ourselves immersed in a sea of financial considerations, pondering our savings, Social Security claims, and the means to finance our later years.

It can feel overwhelming at times.

These are the essential questions that can sometimes keep you up at night.  Humble Dollar explores those questions that touch on the essence of what it means to retire with purpose and fulfillment.

AS FOLKS HURTLE toward retirement, they often wonder whether they’ve saved enough, debate when to claim Social Security, and fret about how they’d pay for long-term care. Make no mistake: Such issues are hugely important.

But amid these financial musings, we should also spare a thought for four other questions:

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How can I transform myself from a diligent saver to a happy spender?

This sounds so easy, and yet many struggle with it, including Ken Begley and including me—and including those who amassed vast fortunes, as Marjorie Kondrack recently discussed.

To be sure, we don’t have to spend our money to get pleasure from it. Simply sitting on a pile of dollar bills can deliver happiness, thanks to the sense of financial security it offers. Similarly, giving away money, whether to loved ones or to charity, can also deliver ample happiness.

Still, I think every diligent saver should ponder whether there are ways to spend more on themselves that could improve their retirement years. I have no clever strategies to suggest that’ll help you go from avid saver to joyful spender. But I’ve found that practice helps.

My advice: Don’t start with a big purchase—a super-lavish vacation or a luxury car. That’ll likely make you uneasy, and there’s a risk you won’t get much pleasure from the money involved. Instead, try buying some smaller items, which often deliver disproportionately greater happiness per dollar spent. If you part with a little more money than usual and it enhances your life, perhaps your attitude will slowly shift and you’ll find yourself enjoying the fruits of your earlier thrift.

What will get me out of bed in the morning?

I’m a big fan of daydreaming.  Assisted by the internet, I muse about vacations I’d like to take, restaurants I want to try, and musicians I’d like to see perform. Daydreaming costs nothing except time, and—I suspect—often delivers just as much pleasure as the real thing.

As you approach retirement, I’d encourage you to daydream about how you’ll use your time once you quit the workforce. Indeed, I think it’s worth creating a lengthy wish list. That wish list will no doubt include fun stuff, like trips you want to take and hobbies you might pursue.

But I’d also include a few items that have the potential to deliver eudaimonic happiness and that could put you in a state that psychology professor Mihaly Csikszentmihalyi referred to as “flow,” where you become completely absorbed in what you’re doing and time just whizzes by. We’re talking about activities that you consider important, that you find challenging, that you’re passionate about, that you feel you’re good at—and which could provide your retirement with a sense of purpose.

That sense of purpose will make your retirement more fulfilling and help to compensate for the identity you lose when you leave full-time work behind. I’ve seen folks mourn the end of their career, with that deflating sense that not only were their accomplishments modest, but also there’ll be no more chances to rectify that. To ease this “grief,” it’s helpful to have something to look forward to—another chance to do good work.

Who are the friends I’ll see regularly?

During our working years, we often count our colleagues among our friends. Yet these friendships often peter out when we change jobs or shift into retirement. How will we make new friends? I wouldn’t leave this to chance encounters and instead have a plan for how you’ll meet others.

And, no, don’t count on family to fill the friendship void. Our adult children often have busy lives and don’t necessarily want to spend big chunks of their limited free time with Mom and Dad. Moreover, as Dennis Friedman has noted, we spend time with friends because we think we’ll enjoy it, whereas with family it’s not solely about enjoyment—there’s also a sense of obligation.

I’m no great fan of retirement communities, but I could imagine my attitude changing in the years ahead. Those who live in retirement communities seem to find it easier to make friends, so these communities might be a good choice for those who fear social isolation and struggle to meet others.

What will my future self think of the decisions I make today?

This is always an important question to ask—but it’s especially important for newly minted retirees because so much will change in the years ahead.

Our mobility may be sharply curtailed or we may find ourselves devoting large chunks of time to medical issues. The activities that appeal to us at age 65—travel, pickleball, caring for the grandkids—may hold scant appeal a dozen years later. Because so much is unknown and things can change so quickly, it’s hard to imagine who we’ll be just a decade down the road.

And yet, despite all the uncertainty, retirement tends to trigger an “end-of-history illusion,” where we assume that our life’s constant change will finally come to an end. Will it? I wouldn’t count on it. Our time in retirement could be marked by major upheaval, and the initial choices we make might get quickly thrown out.

Rick Connor touched on this recently. In 2021, he and his wife Vicky sold their home in the Philadelphia suburbs and moved to a New Jersey beach community, imagining this would be their final stop. And yet they’re already wondering whether they might move again.

I, too, wonder whether the retirement plans that Elaine and I are making today might get torn up just a few years down the road. What to do? Make sure your home will be suitable for your older self. Think long and hard before making major financial commitments, such as a second home or an RV. Don’t rule out options that might seem unappealing today, such as a 55-plus community or a continuing care retirement community. I think flexibility is the key—especially when it comes to housing.

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1. Have you ever contemplated how you can strike a balance between saving for the future and enjoying the present, as discussed in the transformation from diligent saver to joyful spender?
2. What activities or pursuits do you daydream about for your retirement, and do they encompass both leisurely pleasures and endeavors that offer a profound sense of purpose?
3. In considering the importance of cultivating friendships in retirement, have you considered how you plan to maintain and nurture social connections as your life undergoes significant changes?