Ten days ago, the San Francisco Chronicle printed a column by Mark P. Cussen titled “8 Toughest Retirement Decisions.” His list is a pretty good one and, omitting the explanations he gave for each of them (you can read the full text at http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/07/18/investopedia54813.DTL), here it is:
- When to retire.
- When to begin drawing Social Security.
- Where to live.
- Whether to keep working in some capacity.
- Whether to sell the house.
- When to begin taking retirement plan distributions.
- How to manage your investment portfolio.
- How to budget.
By coincidence, my previous blog post was about Cussen’s #2 item, when to begin drawing Social Security, and while I was able to lay out the key considerations, I was not able to provide definitive advice. The most prudent decision depends entirely on the individual situation, and requires a lot of calculation.
We can similarly ponder the other seven decisions in detail later on, but before we do that, I’d like to suggest some other tough decisions that many, or perhaps most, of us should expect to deal with during our retirement years, or in preparation for them. Let me divide these supplementary lists into three categories:
Eight other decisions that are difficult because they are deep:
- Whether your deepest beliefs still feel true to you, and how they will support you (or fail to) during the processes of aging and, eventually, dying.
- How to re-evaluate the meaning of your past life and what you want your future life to mean.
- What new goals you want to set for yourself, and how to readjust those as you continue to age.
- Whether you want to be more involved, less involved, or differently involved in a religious community or in private spiritual practices.
- How to find a mix of leisure activities that you will still be able to pursue and enjoy if your capabilities diminish and/or if your favorite companions are no longer there to participate.
- How you would cope (or will cope, if the decision is already upon you) upon losing your life partner, both in financial terms and, more importantly, in terms of keeping your life intact.
- Whether you want to spend some of your newly available time giving back to your community or country in some fashion.
- How you want to be remembered, by family, or by people more broadly, and what you will do to establish or further solidify this legacy.
Eight other decisions that are difficult because they involve other people:
- How to rebalance your life in terms of productive activity, recreation, rest, and spending time with others.
- How to manage being a caregiver for a parent, spouse, sibling, or other important person in your life, if (or more likely when) that time comes.
- Whether and how to reconnect with people in your life with whom you remain angry, or who remain angry with you.
- Whether you want to live (now, or in the future) with siblings or friends so that you can share expenses and companionship.
- Whether you should enter into loans or other financial relationships with family or friends, and if so, to what extent and in what fashion?
- Whom to include in your will, and in what amounts or percentages.
- Whom to name as your health care proxy and (perhaps more difficult) as your alternate(s).
- Whom to authorize to handle your affairs in case you become incapacitated.
Eight other decisions that are difficult because they are complex, mysterious, or both:
- What you should be doing to take better care of your physical health.
- What you should be doing to take better care of your mental or emotional health.
- How to understand what financial risks you face during the rest of your life, what their likelihood is, and what you can do to be prepared for them.
- How to turn your various financial assets into retirement income.
- Whether and how to turn home equity into retirement income.
- Whether and how to refinance or repay mortgages and other debt.
- Whether you need more life insurance or, probably more likely, whether you have more life insurance than you need (and what to do about it).
- Whether your IRAs or pension accounts should be in traditional or Roth accounts.
These lists are hardly complete. Want to add them? Go right ahead. What’s the biggest problem you see out there as you contemplate retirement, or as you face the prospect of growing older?
Chuck Yanikoski is a retirement adviser who lives and works in Harvard. For more about him, visit http://www.ChuckYRetirement.com.