- 5-Minute Article
- Aug 12, 2018
Want to Pursue Your Passion in Retirement? Create a Passion Plan
How to build a meaningful plan that aligns your life goals with your finances.
For many, retirement means the opportunity to spend more time doing what you love. What that newfound freedom looks like each day depends on your interests. On average, 65- to 74-year-olds spend almost half an hour per day volunteering, one hour on work or work-related activities, and 7.5 hours per day on leisure and sports.1 “Retirement is no longer just a destination. It’s a chance for a new beginning,” says Dorian Mintzer, Ph.D., a social worker and retirement coach. “Think of it as the time of life when you can do that thing that has always been in the back of your mind or in your heart, whether it’s, ‘I’d like to teach’ or ‘I want to volunteer.’”
A Passion Plan can guide you toward your vision and goals, helping ensure you spend your days doing the activities you love, so you get the most out of your time.
Whether you’re nearing retirement or are already there, Mintzer says the time to start building your Passion Plan is now.
To build a Passion Plan, start by identifying your passions. Many people already know exactly what their passion looks like — maybe you’ve always been a traveler, or you can’t wait to spend more time gardening, learning about wine, or spoiling your grandkids. For others, identifying your passion may be more difficult. Mintzer recommends thinking about what you’re interested in, what makes you feel alive, or the interests you had when you were younger.
Give some things that spark your interest a test drive by trying new hobbies, volunteering, or joining groups that appeal to your interests, Mintzer says. “Those kinds of things can morph into opportunities.” Your Passion Plan can evolve as you learn what you enjoy.
Think about how you can incorporate your passion into your retirement in a way that will provide a sense of purpose — and don’t be afraid to think big. While it’s one thing to set aside more time to play guitar, it may be even more fulfilling to teach guitar, join a band, or book some gigs.
Connecting with others through a shared passion can also be a great source of fulfillment, Mintzer says. “We all need connection, engagement, purpose, and meaning. Work gives you that. So it’s important to think about how you’re going to find those things in retirement.”
Many people find joy in creating a product or service out of their passion, she says. One of her clients loved to cook, so she started a small catering business. Another enjoyed both good food and traveling, so she launched a business putting together trips that focus on local cuisine.
- Tip: Passion Plans can combine two or more activities. If you’re a gardener and love teaching, you could teach a class at a local garden center. If you have a passion for giving back, consider creating a community garden.
Volunteer and join clubs and groups related to your passion. Reach out to people who are doing something you think you might enjoy and ask what steps they took to get where they are. How did they get started? What type of training did they have? Do they have any advice for you?
Start with people you know and then expand beyond that. “I tell my clients to take risks — it’s okay to invite someone you don’t know to coffee.” People love to talk about what they’re doing, and they may even offer to help you get started, she says.
Or ask if you can shadow someone. If you want to open a B&B or a winery, for example, spend some time at one, talking to the owners about how much work is really involved.
If you love what you do for a living, you may want to look for ways to use those skills on a part-time basis, perhaps as a teacher or consultant.
That has the added benefit of bringing in additional income during retirement.
If you’re interested in using your professional skills for good and want some inspiration, check out encore.org, which has stories of people from managerial or executive levels who use their skills to benefit society.
Financial considerations are an important component of your Passion Plan. After decades of saving and investing, you need to think about the best way to generate income from your savings while you pursue your passion, says David Nicholas, founder and president of Nicholas Wealth Management in Atlanta.
“If you’re worrying about the markets, or worrying that you’re going to run out of money, that will take time and energy away from pursuing your passion,” Nicholas says, “so you need to have a financial plan in place.”
Here are some things to talk about with your financial advisor as you put together your Passion Plan:
- How much monthly income you’ll need in retirement. What will your living expenses be, and how much income will you need each month for both essential and discretionary expenses? How you plan to pursue your passion — and whether it will bring in any income — should be a big part of the conversation.
- Guaranteed monthly income streams. While you don’t want to keep all of your assets in equities, it’s important to keep some high-risk investments as a hedge against inflation, Nicholas says. To provide assurance and durability, your financial advisor may recommend putting a portion of your portfolio into an annuity, which gives you the option to receive guaranteed income payments that can last as long as you live. Annuities can be a great option, Nicholas says, because they create a dependable source of income to help cover everyday expenses, so you can focus on your passion.
- How to spend your savings in retirement: your income plan. Discuss which assets to spend from first and which types of accounts to withdraw from each year, taking into consideration taxes, early withdrawal penalties, and the required minimum distributions (RMDs) that go into effect at age 70 ½. You should also discuss when to begin collecting Social Security to maximize your payments.
While there’s no single plan for retirement that’s right for everybody, putting together a Passion Plan will give you the confidence and the tools you need to set goals for a meaningful and purposeful retirement. It will align those goals with your finances to ensure that your essential expenses are covered in retirement, so you can confidently do more of what you love.