Most people spend decades preparing financially for retirement. They contribute to retirement accounts, pay down debt, and create plans for how they'll support themselves after they stop working.
But there is another question worth asking: What will you do when you retire?
You probably wouldn’t buy a car without taking it for a test drive. Yet many people retire without ever getting a sense of what retirement will actually be like.
Retirement is more than a financial decision. Testing your budget, routine, location, and activities before you retire can help you identify what's working and what may need adjustment.
š Testing retirement is one part of the process. Learn how retirement planning can help align your savings, income, and lifestyle goals.
Why Is It Helpful to Practice Retirement?
Work can give you more than a paycheck. It can bring structure to your day, regular interaction with others, interesting challenges, and a sense of identity.
When you retire, those parts of working life do not automatically get replaced. Even if you are financially prepared, retirement may be different than you imagined if you have not thought about how you will spend your time.
Practicing certain parts of retirement before you leave work can help you answer questions such as:
- What would an average weekday look like?
- How often would you like to see family and friends?
- Can your retirement budget support the way you want to live?
- What might you miss about work?
You may think you will spend less, travel more, socialize often, and have no trouble filling your days. A trial run gives you a chance to find out before retirement becomes your everyday life.
š Before you can test retirement, it helps to think about planning for life after work and the lifestyle, housing, and financial considerations that often shape retirement.
How Long Should a Retirement Trial Run Last?
There is no perfect amount of time. A few weekends may be enough to try new hobbies or see how you and your spouse settle into a new routine. A month or longer can give you a clearer picture of your budget, daily life, or a potential retirement destination. The longer your trial run lasts, the more you may learn from the experience.
How Can You Test Your Retirement Budget?
Your retirement budget is partly based on what you think you will spend. Trying to live on that amount before you retire can show whether your estimates reflect your actual habits.
For several months, consider limiting your spending to the amount you expect to have available after taxes in retirement. When creating your test budget, look beyond your regular household bills and account for expenses such as:
- Travel and entertainment
- Healthcare and insurance costs
- Home repairs and maintenance
- Gifts and support for family members
- Hobbies and memberships
- Taxes
- Unexpected expenses
Some costs may decline after you stop working, while others may increase. A practice budget can help you identify expenses you overlooked and determine whether your planned spending level is realistic.
How Can Couples Prepare for Retirement Together?
Retirement can be a significant adjustment for couples. You may spend considerably more time together after years of following separate workday schedules.
Before retiring, discuss what each of you wants an ordinary week to look like. One spouse may picture frequent travel and shared activities, while the other may look forward to quiet mornings and personal projects.
If possible, take several weekdays off together and follow a schedule closer to the one you envision in retirement. Consider how well it works for both of you, and where your expectations differ.
This may also be a good opportunity to discuss whether household responsibilities will change. Errands, appointments, finances, meal preparation, and caregiving duties can become sources of frustration if they have not been clearly discussed beforehand.
Should You Test a Potential Retirement Location?
Visiting a place on vacation is different from living there. If you are considering moving in retirement, try spending several weeks in the area and experiencing it as a resident rather than a tourist. Renting before buying can give you a chance to get to know the area before making a long-term housing decision.
As you explore the area, think about what everyday life would actually be like:
- How easy would it be to get the healthcare you need?
- What would you expect to spend on housing, insurance, utilities, and transportation?
- How convenient would it be to get groceries, go out to eat, enjoy recreational activities, and access other services?
- Would you have opportunities to meet people and get involved in the community?
- How easy would it be to visit family and friends?
- Would you enjoy the climate throughout the year?
A potential retirement destination should fit real-life you, not just vacation you.
š Considering a move? Learn more about downsizing in retirement and the factors to evaluate before changing homes.
What Will You Do in Retirement?
When people picture retirement, they often focus on what they will gain: more freedom and control over their days. But it can be just as important to think about what they might leave behind.
Some people value the social connections they have at work. Others enjoy the structure of a daily routine, the challenge of solving problems, or the satisfaction of helping others. Understanding what you value most about work can help you identify what you would like to keep doing in retirement.
Instead of waiting until retirement to find out what you enjoy, consider experimenting now. You might try:
- Volunteering
- Mentoring
- Consulting
- Working part time
- Joining a community organization
- Taking a class
- Developing a hobby
- Seeing family or friends more often
You do not need to fill every hour of the day. The goal is simply to explore activities that provide the right mix of purpose, connection, enjoyment, and structure for the retirement you envision.
š Interested in working after retirement? Unretirement can provide purpose, flexibility, social connection, and income.
Could a Phased Retirement Help You Adjust?
Retirement does not have to happen all at once. If your employer offers the option and the finances work, you may be able to gradually reduce your hours or responsibilities. A phased retirement can help you adjust to a lighter work schedule while maintaining some income, professional connections, and daily structure.
Before cutting back, consider how working fewer hours could affect your pay, employee benefits, retirement plan contributions, future Social Security benefit, and planned retirement date. Understanding those tradeoffs can help you decide whether a phased retirement makes sense for you.
What Did You Learn from Your Retirement Trial Run?
After your retirement trial run, think about what worked and what did not.
Was your budget manageable? Were your days too busy or not structured enough? Did you enjoy being at home? If you tested a possible retirement location, could you picture yourself living there? What did you miss about going to work?
Your answers may confirm that you are on the right track or reveal adjustments you would like to make while you still have time and flexibility to make them.
If you would like to discuss whether your retirement lifestyle and finances fit together, we’re here to help. You can schedule a complimentary introductory meeting with our team in Glastonbury or Wilton, Connecticut, to review your situation.
Have a quick question instead? Send us a note.
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Michael Nicoletti is a CERTIFIED FINANCIAL PLANNER® professional and works with clients throughout Connecticut and nationwide, offering financial planning and wealth management services. Based in Glastonbury and Wilton, CT, Michael helps families and individuals plan for their financial, insurance, investment, and retirement goals. Schedule a complimentary introductory meeting with Michael.
This information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete, it is not a statement of all available data necessary for making an investment decision and it does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Every investor's situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Be sure to contact a qualified professional regarding your particular situation before making any investment or withdrawal decision. Any opinions are those of the author, and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. Raymond James and its advisors do not offer tax or legal advice. You should discuss any tax or legal matters with the appropriate professional.