Your Retirement, Your Values

Whether, when, and how to retire is a question most people will face at some point. Spoiler alert: there isn’t a universal answer!

As the world begins to reopen, there is understandably a focus on the fun part, but many people have to go back to working in person as well. A year ago, lockdowns forced a rapid adjustment to remote work. Now, as more and more people return to the office, they are again facing lengthy commutes as well as new protocols at the office, both formal policies, and informal social standards. For some, this can raise the question of whether they want (or need) to go through another round of rapid adjustment. The pandemic has made consideration of radical change more ordinary, including the significant decision to retire.

Retirement is a very personal choice that’s shaped by individual circumstances, and what’s good for one person may not be right for another. The various factors that our clients regularly consider can be split into two broad categories – quantitative and qualitative.

In The Context of Your Life

Quantitative considerations factor into the question of whether you can retire. One fundamental reason people work is to support themselves and their loved ones financially. Throughout their careers, people accrue resources that are independent of continued work: social security benefits, pensions, personal savings, possibly an inheritance. Taken together, if these various resources can support one’s chosen lifestyle for as long as needed, then the answer is “Yes, you can retire (if you want to).”

Those four words – “if you want to” – invite reflection on the qualitative, nonfinancial aspects of the decision. People work for many important reasons beyond the strictly financial. Work can be a core piece of one’s identity. It can provide purpose to get through the day. It can be a way to be closer to family or friends. It can confer status or offer a sense of belonging and community.

 

When considering whether to retire, start by asking yourself, “Why do I want to retire?” To answer this, it can help to think about your values, that is, your deeply held beliefs and core principles. Stepping away from work may mean stepping away from the primary way that these values are expressed in your life. Thinking about other ways you might express these values can identify other activities that fulfill the same need.

Adapting As We Grow

It’s worth remembering that your values can also change over time, shifting your perspective on what’s important to you. Elements of your work that were satisfying in prior years may have lost their luster. A loved one’s heart attack may spur a new focus on improving your quality of life. Pre-pandemic, you may have been happy to brave your commute, but after a year or more of working with a 10-step commute, you can’t imagine going through the drive (and/or the trip on BART) again – even though you might listen to fewer podcasts.

A successful transition to retirement must express your values in some way; otherwise, it is easy to feel adrift. Understanding the motivation behind your decision, and being prepared for how you will spend your time post-retirement, are key steps to achieving a fulfilling retirement.

This article can also be read in the June 2021 issue of Berkeley Hills Living

Sam Wood-Bednarz, CFP 

About Sam Wood-Bednarz, CFP®

Sam Wood-Bednarz is a Partner and Lead Advisor who serves as Director of Financial Planning. Through comprehensive financial planning and investment management, Sam provides his clients with a sense of confidence and security in their financial lives and helps them make sound decisions as life happens.

Read more about Sam

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This commentary on this website reflects the personal opinions, viewpoints, and analyses of the North Berkeley Wealth Management (“North Berkeley”) employees providing such comments, and should not be regarded as a description of advisory services provided by North Berkeley or performance returns of any North Berkeley client. The views reflected in the commentary are subject to change at any time without notice. Nothing on this website constitutes investment advice, performance data, or any recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. North Berkeley manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.

By |2021-06-03T10:45:51-07:00May 11th, 2021|