Planning for the 4 Phases of Retirement: Early Retirement

November 8, 2016
DMD Staff

Retirement consists of 4 key phases. Here, we’ll present some key considerations for each phase in 4 parts. This is Part 2.

, we looked at key considerations for the phase right before retirement. Now, let’s take a look at those dicey first few years after retirement.

Why “dicey?” While there isn’t much clinical research to back it up, anecdotal evidence suggests that the first few years of retirement can be the most difficult. Why? First of all, retiring is a big change for which few are fully mentally prepared. This may be especially true for dentists and other healthcare providers who often consider their career as part of a larger calling. Secondly, the early retirement years are when you start to settle into patterns of behavior that often become the norm in your sunset years.

Third, for the first time perhaps in your life, now is when the overall asset column starts its inevitable dip. This means a mindset adjustment, from one of building wealth for the future, to one of making your income last the remainder of your lifetime. Sounds intimidating, doesn’t it? Let’s look at some things to think about.

Key considerations:

· Measure and monitor. When the income stops rolling in and you start to use your retirement savings, you’ll want to closely monitor where your money goes and measure that against what you’ve budgeted. Don’t have a budget? You’re going to need one, even if you’re cozy in the knowledge that you have plenty of income set aside. Why? Because once income stops rolling in regularly, your peace of mind will depend on knowing exactly how much you have outgoing. The tendency for some in early retirement may be to go on several immediate vacations and engage in some spending splurges. And while that may be right for some, many would be wiser to take things slow at first and see how they feel.

· Consider part-time work. Yes, this will cut into the idea of not having any responsibilities, but depending on your health and the age at which you retire, this may be your greatest opportunity to pursue another long-held interest or just meet some new and different challenges through part-time employment. No doubt there will be opportunities to fill in for a vacationing dentist, but you may find your way to other pursuits as well. Be open to them.

· Keep an eye on health benefits and Medicare changes. As a healthcare professional, you know better than most that Medicare changes from year to year. So may any health plan you maintain. Make sure you know what changes to your benefits are about to occur before they do, and always consider your current health status and that of your family members before making any substantial health plan changes. This advice seems obvious, right? But you’d be surprised how many recently retired people end up going back to work because the status quo changed when it came to health. That’s the simple fact with health: It’s more likely to change than to stay the same.

· Keep an eye on your mental health. Let’s just be blunt about it: This is an adjustment period. Going from the daily grind of patient care to hours of leisure spread out before you may sound ideal on certain rainy Mondays, but every single person who has ever retired from anything has gone through a period of uncertainty. Know that it’s coming, and take steps to prepare for it. Those steps may include planning more activities, communicating closely with your partner about how you feel, considering volunteering in the community, or even joining retirement groups or communities of people facing similar challenges.

Yes, early retirement will involve an adjustment period, but it doesn’t have to bring anxiety. Be prepared, and be mindful of your own health. In the last part, we’ll look at middle and late retirement.