By: AnnaMarie Mock, CFP®
Gap Years are Open to Everyone
Gap years are no longer just for recent graduates but are now for seniors who may not have had the time to pursue their passions or try something new during their working years.
For many retirees coming from a work-centric culture, retirement may feel like crossing the finish line, followed by winding down and boredom. However, leisure in retirement has evolved into an extended period of newfound freedom due to longer lifespans.
Retirement provides an opportunity to do something completely different that wasn't possible during your working years – volunteering, hobbies, relocating, etc. It's a time to be defined by something other than work and allow for a new identity. After a lifetime of working in an office or running an entire household, it may be difficult to detach from the prior routine, causing a feeling of ambiguity.
Planning for a Good Transition Into Retirement
Although financial planning in preparation for retirement is pertinent for successful execution, the gap year focuses on retirement's social and physiological transition. It's an opportunity to 'practice' retirement to manage unstructured time to not fall into a boredom spiral.
Many people take practical steps ahead of time to fund their children's education or anticipate a home remodeling project. However, envisioning and planning for how to best fund one's retirement leisure dreams is uncommon.
Based on a recent study conducted by Merrill Lynch, 88% of retirees view retirement as new beginnings, but how can it become a reality?
Here are some ideas to begin brainstorming about how you envision the first year of your retirement.
New locales: Retirees can use the year following retirement to chart a course for their future residency extending to international locations. We recommend assimilating yourself into the daily lifestyle before purchasing a home in a new area to ensure you like it. In the age of Airbnb and VRBO, it is cost-effective and straightforward to rent a home for a couple of months beforehand to minimize the financial burden that moving multiple times in short increments can have.
Travel: Without the confinement of work or family restrictions, there is more flexibility to pursue memorable experiences traveling, whether a day trip or immersion into a new place and culture. According to the Merrill Lynch study, regardless of the travel companions, enjoying each other's company and deepening relationships are the top priorities for experiential travel.
Possibly returning to work: Early on in retirement, some individuals make working in any type of capacity part of their golden years, whether that's taking on a part-time job, opening a consulting business, or starting a small business. It can provide a further sense of accomplishment while allotting the leisure time desired that may not have been attainable before.
Personal enrichment: Learning is evergreen and has no age limit. There are many opportunities available to retirees, usually at a low cost, to attend classes at traditional universities or institutes dedicated to those with a love of lifelong learning. Most of the courses are inexpensive or even free, depending on the facility.
At Highland, we do comprehensive financial planning, collaborate to identify and quantify your financial goals to help you make better choices towards achieving your retirement plan. This step in the process can be a tremendous diving-off point to be introspective and determine how you want to set the stage for your retirement.
AnnaMarie Mock is a CERTIFIED FINANCIAL PLANNER™ and Partner at HIGHLAND Financial Advisors, LLC, a Fee-Only financial planning firm that offers comprehensive financial planning, retirement planning, employer retirement planning, and investment management. AnnaMarie graduated from Montclair State University with a degree in finance and management and successfully passed the CFP® national exam in 2016. She has been working at Highland Financial Advisors since 2013 as a fee-only, fiduciary Wealth Advisor and is a member of NAPFA.