When most people think of retirement planning, they picture pie charts indicating ideal asset diversification, columns of annual contribution amounts corresponding to target retirement dates, and charts showing growth numbers based on predicted market returns. While creating a nest egg is undoubtedly a key component of a successful retirement plan—most of us have to keep working without one—focusing on numbers alone fails to prepare workers for life after employment. Having money does not make a successful retirement. Sometimes, people with less enjoy their retirements more. Clearly, retirement planning must involve how to live after retirement, in addition to budgeting for it.
To serve this need, Joseph Couglin, Director of the Massachusetts Institute of Technology Agelab, foresees the retirement planning industry either embracing a more holistic approach to preparing for life after work or having their market share taken over by innovators who embrace this concept. He cites the success of companies in other industries that offer more than products or minimal services. The truly successful ones also offer education and experience. For example, Whole Foods teaches its customers how to eat healthily. Sephora teaches its customers how to utilize cosmetics. Drop by any Apple store and you see employees teaching customers how to get the most from their products. Retirement, Couglin argues, is also a product a person chooses to purchase, and sellers need to help buyers consider how life will look with their new product.
By saving now, people are able to afford retirement later, but many don’t really know what they’re buying and what it will mean to their lifestyles to live on what they have saved. The financial industry teaches a lot about how to save and grow money but little about what to do with it. That seems a bit like selling a car by giving a lecture on auto loans.
What can people learn about having a happy retirement? Money magazine notes that retirees thrive when, in addition to a predictable paycheck, they engage in work they choose (not for the sake of the money), take on cherished hobbies that keep their schedules full, unburden themselves of house maintenance and cost, and live in a socially connected community. When retirement planning encompasses the goals of retirement, as opposed to just the financial savings and growth goals, it becomes a plan for a well-rounded, happy life. After decades of hard work and sacrifice, isn’t that what retirement should be about?