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You've spent decades working toward retirement. You know your asset allocation, maybe you've even run Monte
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Carlo simulations, and you could probably explain your safe withdrawal rate at a dinner party without any
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notes. You're ready. But let me ask you something you might not have the answer to. What are you actually going to do on
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a a random Tuesday in year four of retirement? Now, if that question gives you pause, this episode is for you.
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>> Welcome to Personal Finance for Long-Term Investors, where we believe Benjamin Franklin's advice that an
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investment in knowledge pays the best interest both in finances and in your life. Every episode teaches you personal
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finance and long-term investing in simple terms. Now, here's your host, Jesse Cramer.
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>> Welcome to Personal Finance for Long-Term Investors episode 144. I'm Jesse Cramer, a financial planner
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working with retirees [music] and busy professionals getting ready for retirement all across the USA. You can
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learn more at planwithjesse.com. This week's review of [music] the week is from Time Freedom First, who left
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kind words and a five-star rating on Apple Podcasts. So, Time Freedom First, you can drop an email to
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[email protected], and I'll get a super soft podcast t-shirt mailed out to
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you. All right, on with the show. There's a version of retirement that looks great on paper. You know, you've
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probably hit your numbers, you're you're leaving work on your own terms, you've got some time, you've got plenty of
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resources, and you've got freedom. And this is what we spend most of our time talking about here on this podcast. And
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thinking about the resources that is, right? And the optimization. And it's certainly something that I spend most of
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my time thinking about and working on at work. But then there's the version of what actually happens to a lot of
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retirees where the freedom itself maybe feels unmoored, untethered, uncertain, maybe even a [clears throat] little
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disorienting. The days start to blur together in retirement. And something, maybe even something they can't quite
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name, feels off. And the gap between the idealized version of retirement and sometimes the actual version of
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retirement, right? It's not a financial gap. The money part, the resources are just fine. The gap is in everything that
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the financial plan probably doesn't account for, identity, connection, and structure. This invisible architecture
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of a working life that we don't actually notice until that working life is gone.
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So, today I want to make that architecture visible for all of you. And more importantly, I want to give you
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ways to start building that architecture for yourself, that retirement version of
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that architecture. Ideally, you can start building it before you actually need it, but perhaps right now is the
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best time imaginable for you to consider it. So, we're going to walk through three areas in detail. First, identity,
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who you are when your job title no longer describes you. Second, relationships, what happens to your
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social world when your built-in social structure of work disappears overnight. And then third, routine, how you build a
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life with some shape and some purpose to it when your schedule is wide open. And
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then at the end, I'll work through a list of some common blind spots and some pitfalls that might not quite make sense
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at ages 40 or 50 or 60, but do become important realities in retirement at age 60, 70, 80, and beyond. So, let's start
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with the first of the three big segments today, identity. So, here's a a sobering
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statistic. A 2018 study from the Institute of Economic Affairs found that retirement increases the probability of
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clinical depression by roughly 40%. And researchers consistently point to the same underlying cause, the loss of
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professional identity as a primary source of meaning, structure, and social belonging. And then a 2020 study in the
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Journal of Organizational Behavior found that people whose identities were heavily anchored in their careers often
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experienced some form of identity crisis before they could move forward really into retirement. And here's what makes
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it tricky for high-achieving, long-term planners specifically. The more competent and committed you were at
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work, the more your identity was probably built around or interwoven with work. I would argue that many of you
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listening right now might fit into that bucket, high-achieving, long-term planning, competent and committed
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individuals. Sounds a lot like this audience, and yet it's those very skills or talents or character traits that make
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the transition into retirement sometimes a challenge. So, let's think about the last gathering you went to, you know,
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social gathering. Someone walks up to you, they extend their hand, and they ask you one of the most common questions
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in the English language, so what do you do? And you probably answered without thinking a few sentences maybe with your
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title and your company and your industry and you're done. But now, if you imagine
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you're a couple years into retirement, the same party, the same question, the same outstretched hand, for a lot of
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retirees, that is the kind of moment when they realize how much weight their career was actually carrying. It helped
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define your place in the world and your value in the world and your story in the
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world, and for decades your career answered those questions for you somewhat automatically, right? Without
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any extra effort on your part. And a lot of retirees feel strange when the answer
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it used to be I am a, right? I am a pilot, I am a engineer, I'm a teacher, and it turns into I used to be. I used
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to be a pilot, I used to be an engineer, I used to be a teacher. So, here's something I'd encourage you to do, and I
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mean, actually do. We've had a few different exercises that I I kind of wrote into today's episode. So,
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obviously, if you're listening right now on a walk or as you drive, you don't have to do this exercise, but try to
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remember this exercise the next time you're at your desk. Or, by all means, listen to this complete episode and then
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maybe come back through it and do these exercises next time you've got a pen and
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paper in hand. Or, I suppose you could always pause the podcast and do it out loud. So, what's the exercise? The
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exercise is to write your retirement bio, a genuine answer to the question, who are you right now without your job
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title? It's actually a little harder than it sounds, and most people start writing and they might realize that the
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first couple sentences are still about their former career. Well, I had 40 years I was an engineer at General
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Electric. And that's fine, cuz it tells you exactly how much identity work might
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still be ahead of you. A good retirement bio, or at least one version of a good retirement bio, probably answers these
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three big things. What you care about, how you spend your time, and what you are building or contributing to. Well,
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again, this doesn't have to be a polished or permanent document, but it should be able to probably stand on its
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own without referencing what you used to do for a living. So, here's a a very simple example for a again, this is a
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retirement bio. I spend most of my mornings outdoors hiking or working in the garden depending on the season.
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Three days a week I I mentor some early career professionals through this local business program in my area to helping
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them think through decisions they might not have experience yet to navigate on their own. My wife and I are learning
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Italian kind of somewhat because we're actually going to spend two months in Sicily next fall. We're both of Sicilian
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heritage and I'm about 40 pages into writing something that might become a book, it might just become a a really
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long document that nobody ever reads, but either way I'm writing it. I'm really enjoying writing it. Uh we love a
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lot. We love hosting other couples over at our house and in our downtime my wife
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and I are are working our way through this top 100 TV shows of all time list catching up on some excellent shows that
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we missed during our busy working years. And in summary that that pretty much fills up our days. So now, that was one
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example of a retirement bio and dare I say it sounds fairly fulfilling to me and there was zero mention there of what
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this hypothetical guy and his hypothetical wife what their actual careers were. And that brings me to an
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action step for this segment, the identity segment of today's show. So ideally a year or two before you retire,
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but it's okay to do this if you're already retired, identify two or three roles. That's not uh r o l l like a
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dinner roll, it's r o l e like a role in a play. Uh identify two or three roles that will define you in your first years
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of retirement. Not hobbies per se, but roles and the distinction there at least to me a hobby is something you do, a
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role is something or someone you are. So, you know, golfer is probably a hobby, but volunteer golf coach at the
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local course, now that's a role. Board member at the animal shelter, that's probably a role. Uh part-time babysitter
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for my grandkids, that's a role. Yes, of course you want hobbies too, but the difference is that a role requires some
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accountability, the sense that someone out there is counting on you to show up. And that's not incidental. You know, one
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of the things that work provides that we don't really talk about that much is the
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feeling of being needed, that other people are counting on you in big ways or small ways to show up every day and
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do a job. And when you remove that feeling, that responsibility overnight, it can leave a hole that, you know,
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daily golf won't fill, but being the volunteer golf coach will fill. So, think in terms of some roles. Two or
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three roles is probably more than enough. Write them down. If you can't name them yet, no problem, but that's
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your homework because a financial plan without an answer to that question does have a gap in it, whether the
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spreadsheet shows it or not. Here's a quick ad, and then we'll get back to the show. Did you know my
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written blog, The Best Interest, was nominated for 2022 Personal Finance Blog of the Year, and it's been highlighted
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in The Wall Street Journal, Yahoo Finance, and on CNBC? I love writing, especially when that
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writing is to share financial education, and I usually write one or two articles
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per week. You can read them all at bestinterest.blog. Again, the web address is bestinterest.blog.
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Check it out. With that, let's put a pin in identity, and now let's move forward onto our
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second pillar of the day, relationships. And we're going to start by talking about another thing that nobody puts
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into their retirement plan, and that thing is loneliness. Nearly one in three adults between ages 50 and 80 reported
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feeling socially isolated in 2024. And researchers have found that loneliness raises the risk of mortality by about
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25%, placing it alongside smoking and obesity as a major public health threat. Now, I'm not necessarily saying that
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retirement causes loneliness, right? The relationship there is probably more complicated than that, clearly not quite
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so causal as that. But what the work does consistently show is that work, you know, being employed, is a social
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infrastructure, a social architecture. And most of us don't realize how much we're relying on that social
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infrastructure until it's gone. But when it comes to relationships, it's more about friendships and colleagues and and
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people to chat with over coffee. It's also about spouses and other partners. And that's a big part of retirement,
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too. Another research study shows that 62% of couples retire at different times. And even when they retire
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together, the shift to suddenly being home together full-time catches a lot of couples completely off guard. For 40
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years, they were working their full days totally separately, and now they're spending all their time at home
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together. Marnie Feuer man, who's a couple's therapist, she put it plainly about retirement when she says, quote,
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"There will be an adjustment period and couples need to cut each other some slack. It takes time to adjust to each
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other's new boundaries and new limits." End quote. Retirement really is a stress
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test for relationships like that, and plenty of couples discover that they've been relying on their separate work
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lives to maintain some harmony at home. And now, when the work lives end, the harmony at home might disappear, at
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least temporarily, too. So, think about for a second what work actually provides, socially speaking. So, for
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many of us, it's a built-in community of people we see every day. It's a shared mission that gives us something to talk
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about. It's lot lots and lots of, you know, nice casual interactions at the coffee machine, passing by in the
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hallways. Lots of colleagues become friends, or at least friendly, and maybe you have clients. Clients can become
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friends or friendly almost by default because you're seeing the same people time after time in close proximity for
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years. And something I've realized over time is that a lot of these interactions
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and relationships are ambient. They're happening around you while you're focused on on something else, right?
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You're you're kind of focused on doing your job, and yet the relationships and interactions are are happening there in
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the background, too. And I think a big reason why it's so easy to underestimate what happens when you retire is because
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of that reason. It's that you might not have actually been paying attention to the relationship side of it that much,
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anyway. To you, it was just work. And there in the background, the relationships were certainly building
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along the way. Then retirement comes and it all stops all at once, you know, the
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calendar clears up and your inbox or teams or slack or whatever it is these days goes quiet. And maybe in the first
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few weeks of retirement that feels like freedom, but fast forward a few months or a year or two and a lot of retirees
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notice that the silence is too quiet and the days have a lot more open space that
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isn't being filled. And what they're feeling isn't laziness or boredom, at least not usually. At least one of the
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things they're feeling is the absence of social infrastructure. An infrastructure
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again that was ambient. They never really had to build it because work was automatically building it for them
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without them really trying. So, here's the exercise for this segment of the show and again, I'd encourage you to
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actually do this when you have time, not just nod along. And this one is targeted
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again especially toward people who are still working. If you're retired, great, you should still do it anyway, but if
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you're still working, this is an important one. The exercise is to audit your work social life. Audit your work
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social life. Sit down and list the people that you'd call genuine friends, people you'd reach out to independent of
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work, people you'd stay in touch with if you both of you changed jobs tomorrow, but then separately list the colleagues
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that yeah, you're you're friendly with, but you're friendly with them primarily because of work. For most people, the
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second list of kind of incidental friends because of work, that second list is way longer than they expected to
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be. It's not really a flaw, it's just the way that social life works when you're at work, when you're busy. And
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employment, work puts you in proximity with many different people repeatedly over time and that's a pretty good basic
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formula for friendship. But those proximity-based relationships don't usually survive the removal of that
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proximity. I mean, I can raise my hand and it makes me feel guilty sometimes, right? I spent 7 years working as an
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engineer and there are very, very few of my former engineering colleagues who I'd
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say I keep in close contact with, including some who at the time I I saw every day and considered myself really
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good buddies with them. My cube was really close to them. We literally would see each other 5 days a week for many
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years. And yet, even though I don't see them every day and I candidly don't keep
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in as good of touch with them as I as I should and maybe some of that is cuz life just gets busy and everybody
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understands, but that's the way it works for me here at 36. And of course, I could understand that that's the way it
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probably works in retirement, too. It's that removal of proximity and it's a big
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reason why many work relationships just fall to the wayside in retirement. And even if you do intentionally grab lunch
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with your former colleagues a few times a year, it's hard to maintain the same level of relationship if it's only a few
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times a year. You know, you used to see these people every single day. So, the action step here is simple to describe,
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but probably a little harder to execute. It's that before you retire, start deliberately investing in friendships
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and communities that exist completely outside of work. And this has to be probably the biggest, but certainly one
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of the primary strategies for your relationships in retirement. So, okay, what are some ideas? It might mean
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getting serious about a recurring activity. Weekly tennis game, a book club, a volunteer commitment, something
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like that that puts you in repeated contact with the same people over time. Remember, proximity and repetition is a
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great formula for building friendships. You're just recreating it intentionally via your chosen activities instead of
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accidentally through work. It might also mean having an honest conversation with
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your partner about what your social life as a retired couple actually looks like.
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Do you have shared friends? Do you have parallel friends? A mix of both, maybe, involving some couples that you both get
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along with? Do you have things you do together outside the house whether as a hobby or as a role. And the goal here
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isn't to jam-pack your social calendar necessarily, but instead the goal is to achieve some sort of social life that
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doesn't depend on your employer to exist. And building that type of social life is probably one of the most
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underrated things you can do to prepare for the softer side of retirement. So, now we we've talked about who you are
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without your work and we've talked about who you're connected to without your workplace. And now we're going to pivot
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to the third thing that work has been doing for you all these years. Work has been giving your days a shape and a
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structure and a skeleton and a schedule. And that's what we're going to talk about next. You know, there's a a funny
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challenge that comes with unlimited free time. It's harder to manage than it sounds. Research consistently shows that
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the shift from full-time work to having no specific obligations can certainly feel exciting initially, but then
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quickly starts to feel emptier than retirees would expect. The structured nature of a working life, it gives way
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to these long unstructured days that many retirees find genuinely difficult to navigate. You know, feelings of
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boredom and that feeling of a a lack of productivity are among the most commonly
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reported surprises of retirement, especially actually early retirement it turns out. Once people achieve maybe age
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60, 62, 65, something in their mind says like, "Yeah, I've done my 40 years. I don't quite feel the need to be uber
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productive anymore." But something about early retirees, people retiring in their
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40s and 50s, they do report that lack of productivity at a higher rate. And I wonder maybe if it's because hey, if you
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were productive enough to retire at 45, probably means you were very very productive during your career, maybe
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even a a little bit over the top and how productive you could have been and just,
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you know, you worked long hours for a hard-driving company. And maybe you are the kind of person who all of a sudden
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when you try to turn it off says, "I don't feel productive anymore and I don't like it." Anyway, that's just my
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uh very amateur observation. And I want to pivot to a recent Wall Street Journal
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article by uh Steven Kreider Yoder and his spouse, Karen Kreider Yoder. And they're both in their late 60s. Steven
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was a editor for the Wall Street Journal and I don't think Karen worked for the journal, but she's a good writer anyway
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and they're married. And the headline of the article that they co-wrote, they kind of took turns writing this article
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and I'll link the article in the show notes. The headline is, "Where does our free time go in retirement? Too often,
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it's social media." And then the subtitle of the article is, "We're trying to fight our smartphone
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addiction, but with so much time on our hands and no job calling us, it isn't easy. I found it to be an eye-opening
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article. I'm really glad they wrote it. So, Steven writes, "I'm part of an epidemic among retirees, I'm convinced.
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Studies warn us that social media may harm children, and such scrutiny is critical. Addictive sites clearly can
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plague working adults, too. But, we retirees have a particular vulnerability. We have time on our hands
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and no external authority telling us to snap out of it. Let's have a show of hands. How many retirees have ended a
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day looking up from the phone, wondering where the time went, and feeling the mental equivalent of having finished off
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a family-sized bag of potato chips? Yeah, that's what I thought. On the job, I did my share of surreptitious video
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watching and Twitter scrolling and e-commercing, but deadlines and bosses drew me back into the real world, much
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as the school day and homework and parents broke my TV trance as a kid. As a retiree, I have little to rely on but
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self-control, of which I have little when my phone is in my hand. From my point of view, it's not necessarily a
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moral argument against social media, though I do think there's probably a good one to make there. It's more of a a
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design argument about your day-to-day. We want to try to build a retirement structure that gives your time somewhere
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better to go than, in Mr. Yoder's case, into his smartphone. And of course, this
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can be challenging. The structure has to come entirely from you, and then that's
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something that Steven was writing about right there. There aren't deadlines or meetings or deliverables or customers or
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performance reviews to think about anymore. It's just you alone, your days and your time. So, I'm going to just
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pause here really quick for a quick distinction that, yeah, might be worth holding on to. I do think there's a
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difference between a a schedule and some sort of like weekly rhythm. I don't think I'm not advocating for an
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hour-by-hour retirement schedule. Some of us, that's how our work calendars look. We have every hour scheduled out
00:19:04
during the work week. But, this word that I'm going to use, which I couldn't quite find a better word for it, so I
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called it a retirement rhythm. A rhythm is more of a set of these recurring anchors that give your weeks some
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recognizable shape or maybe they give your months a recognizable shape. That's up for you, but I chose week. It gives
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your week a recognizable shape, but it doesn't go so far as to dictate kind of minute by minute or hour by hour. A lot
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of retirement advice jumps straight to the scheduling itself. They say keep it calendar and they say treat your
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retirement like a job, you know, block your time out like you would at a job and I understand the impulse, but I do
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think it's worth pushing back on slightly cuz I think trying to replicate the density working schedule in
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retirement is hard to do. It tends not to stick and I just say that cuz in some ways I've always thought about weekends
00:19:47
and vacations as almost these like mini testing grounds for retirement. Meaning like when I think about my Saturday and
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Sunday, I know these like broad strokes of things that I want to get done on a Saturday and Sunday, but I do not have a
00:20:00
schedule for my Saturday and Sunday the same way I do at work. The same thing goes on for vacation. When we go on
00:20:05
vacation, we do some research beforehand and we think about the places we go and
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the things we want to do in each city, but we don't have a, you know, 30-minute blocked out schedule for vacation. And I
00:20:16
think it's probably most helpful to think of retirement the same way. Something that works well both what the
00:20:21
research say and what some anecdotal evidence point to is having that quote unquote rhythm. I'll use that word
00:20:27
again, the rhythm. So, a consistent morning routine, a few days each week anchored by some sort of commitment that
00:20:32
someone else is counting on you to show up for, some big project that pulls you forward into the future, physical
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movement built into your week, not necessarily just as exercise for its own sake, but as a part of a structure to
00:20:44
build around. You can also include right social touchpoints that occur without requiring some sort of constant
00:20:49
planning. So again, there's there's an overlap here as you can see between identity, relationships, and scheduling
00:20:55
structure. But yeah, that's not a true work schedule, but it's also not completely formless, right? There's some
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sort of skeleton, some sort of rhythm in there that the rest of your days, the rest of your weeks can be built from.
00:21:05
So, the action step for this segment is to draft what I would call a retirement week rhythm or retirement weekly
00:21:12
template. Not minute by minute, but a loose map of the week that identifies your big anchors. Again, the recurring
00:21:19
commitments, the routines, the activities that give each day some shape and some structures. I suppose there's
00:21:24
maybe you know, infinite categories that you can think of, but at least for me, the way I would approach it, I think of
00:21:30
my days in kind of four categories or at least I try to. Especially if I had all
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the free time in the world. Work days definitely are a little different. Having my days currently with two small
00:21:40
children feels a little different. But if I had a free day, if I had a day, if it was a weekend day and maybe my family
00:21:45
was out of town and it was just me, there are four categories that I would think of. A morning routine, so
00:21:50
something consistent that starts your day with some intention. Second would be some physical activity. Again, not
00:21:55
necessarily a gym schedule, but just some physical movement that's built into the week in a predictable way. Third
00:22:01
would be social commitments. Some sort of recurring touchpoint with other people each week. And ideally something
00:22:07
that someone expects you to show up to, right? It's not something that you can easily blow off. And then the fourth one
00:22:11
would be some sort of big project or contribution. Something I'm I'm building or something I'm learning or something
00:22:17
I'm giving away that has forward momentum to it. And then of course the rest of the day, the rest of the week
00:22:22
can fill in around those things. Cuz something you'll notice in there is like, you know, one of the pillars isn't
00:22:27
time to wind down and and watch some TV. Of course I could do that if I want to,
00:22:32
but the whole point is that these are some kind of important things at least for me. And I think important things for
00:22:36
a lot of different people that once you have these anchors in place, the rest of
00:22:41
the day, the rest of the day will fill in. So, just a fun example here. We've got our retiree Bob the Builder. Bob was
00:22:46
a former engineer. He's in his late 60s. He was always a project oriented guy. Not naturally social per se. So, his
00:22:53
morning routine is is just coffee, black coffee and 30 minutes of reading anything that's non-fiction. His
00:22:58
physical activity, he takes a 45 minute walk every morning, the same route, the same time, with the same dog. It's
00:23:03
usually the same dog. His social commitments, he's got a Tuesday lunch with a small group of retired
00:23:08
colleagues, and Saturday mornings he's always at this week's Habitat for Humanity build site, giving him some
00:23:13
social interaction. And then for his big project, you know, that kind of recurring thing that pulls him into the
00:23:18
future, he's restoring a 1967 Mustang in his garage, and he's got a spreadsheet where he's tracking that project. So,
00:23:25
you can see, you know, he's got morning routine, physical activity, social commitments, and a project. It's not a
00:23:30
complete schedule. There's nothing very specific about the schedule in terms of actual times, but it's the idea of
00:23:36
having some rhythm and having some anchors in your life. You need enough anchors that the week has a skeleton to
00:23:41
it, and the rest can be genuinely unstructured, and that unstructured time is going to feel like freedom rather
00:23:47
than emptiness, because it exists inside a framework. I think this is a really fun exercise, and I went through it
00:23:52
myself, and I thought about, you know, what would my retirement template look like if I had to do it. Now, I'm not
00:23:57
planning on retiring anytime soon, but if I had to do it, I would think about I'm an early riser, and I love starting
00:24:02
my day with coffee, and I don't usually eat breakfast, but I'd love to take the dog for a a walk every day, so that
00:24:07
sounds like a great way to start the day, a great morning routine to kind of anchor my my days. It also checks off a
00:24:12
little physical activity. But, on the actual topic of physical activity, big fan of racket sports, so I could do that
00:24:18
two or three times a week. It's also a good social anchor, cuz usually when you're playing a racket sport, you have
00:24:22
to have someone to play against. Social commitments, I do some volunteering around Rochester. I'm a member of the
00:24:26
Rochester Rotary. It's just, you know, great ways to interact with people and and do some good in the world. And my
00:24:32
wife and I are both pretty social, too, and I could see us building some recurring social outings into our weeks.
00:24:37
And then the project is a really exciting one to think about. I mean, as of today, the blog and this podcast are
00:24:42
huge projects of mine, but do I want them to continue forever into retirement? I genuinely don't know, but
00:24:47
I feel like the world is this amazing oyster when it comes to long-term committed projects, and I'd be excited
00:24:52
to brainstorm here and just think of all the cool things I could do. So, if you can't tell, I think this activity is
00:24:56
pretty fun, exciting, and interesting, and invigorating to think about what you would do with all that time. And of
00:25:02
course, important to ensure it's an important exercise to do to ensure that you have a successful retirement. So,
00:25:07
what does your retirement template, your retirement rhythm, those anchors every week, what does that look like? How are
00:25:12
you structuring your average week? I would think about that if I were you. Here's a quick ad, and then we'll get
00:25:18
back to the show. I send a free weekly email to thousands of readers that shares two simple things, just two. The
00:25:23
first are my new articles and podcasts, so you'll never miss when I publish new content. And the second is my favorite
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financial content from other corners of the internet, so you can see what's been
00:25:32
helping me the most. Ah, but Jesse, I don't want another email. I hear you. I make this newsletter short, sweet, and
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homepage at bestinterest.blog, and you'll get a free PDF of my white paper titled the step-by-step guide to
00:25:55
building your retirement paycheck. That's right, a free weekly email that thousands of people like you are already
00:26:00
reading, a free white paper to help you plan for retirement, and you can sign up
00:26:04
for free at bestinterest.blog. So, that's some thought for you all on routine and structure, our third major
00:26:11
pillar. So, now let's pivot to some pitfalls and some blind spots that when people plan for this softer side of
00:26:17
retirement, they're not quite aware of. A few of these I think are really interesting, really cool to think about.
00:26:22
So, I'm going to start with my favorite one, rather than bury it to the end. My favorite one is called the end of
00:26:26
history illusion. Left to their own devices, almost every person falls for this in some way. It's very, very
00:26:32
common. In short, it occurs when someone fully recognizes how much they've changed in the past, yet simultaneously
00:26:38
believes that their current self will remain unchanged compared to their future self. It's as if you could say
00:26:44
history simply ends today for them. We all recognize that we've changed over our past, but few of us account for how
00:26:50
how we're going to change in the future. So, you could say that the weekly template that I just designed a couple
00:26:54
minutes ago with racket sports and dog walks, while fun for me today, it's likely maybe not that effective or
00:27:01
realistic because by the time I retire, who knows what I'm going to be interested in. I'm interested in those
00:27:06
things today, but I probably won't be interested in them in the future. I didn't even know I didn't even play
00:27:12
tennis and squash 20 years ago, and now it's two of my favorite pastimes. So, who knows what my favorite pastimes are
00:27:18
going to be 20 years from now. So, that's the end of history illusion. And it's just I think a good reminder here
00:27:24
is that your retirement bio and the role finding exercise and the weekly template
00:27:28
exercise, you can treat them as living documents meant to be edited. They're not necessarily solved problems. That
00:27:34
brings us to the second fallacy or the second bias or the second pitfall. It's the arrival fallacy, a false belief that
00:27:41
reaching a major goal, retirement in this case, will produce lasting happiness. As in, I finally arrived.
00:27:46
It's the arrival fallacy. I've made it. Many retirees are shocked to find that making it doesn't feel the way that they
00:27:52
had imagined it would. The anticipation often exceeds the reality not because retirement is bad, but because the brain
00:27:57
quickly adapts to the new baselines. Adaptation is a big theme in the world of of happiness and finances. We quickly
00:28:04
adjust, we quickly adapt in our life, both good and bad, and retirement isn't an arrival or at least that's the
00:28:11
important thing to try to remind ourselves of right now. Retirement is not an arrival. It is a very nice mile
00:28:16
marker on what's probably a never-ending journey. It's not the finish line. And that brings us to the third one on this
00:28:22
list, a very famous one if you've listened to enough or just read enough kind of psychology and then finance
00:28:27
books. It's the hedonic treadmill. The fact is that the novelty of retirement activities, traveling, golfing every
00:28:33
day, sleeping in, that fades faster than expected. And what felt like a reward becomes the new normal within months.
00:28:40
And what felt like something special just becomes kind of plain and normal within a few months. So, without deeper
00:28:45
sources of meaning, such as the roles that we discussed earlier, retirees can find themselves chasing novelty just to
00:28:51
feel engaged. The next pitfall is the productivity trap. Many high-achieving retirees can't tolerate unproductive
00:28:58
time. We already talked about this one earlier. They have this a need, this desire to fill every hour, to
00:29:04
over-schedule themselves, to mistake the act of being busy with meaning. And the
00:29:09
trap is that they end up recreating the stress of their working lives in their retirement, but without the financial
00:29:15
reward or without structure, and they end up kind of burning out on retirement itself. So, that's the productivity
00:29:20
trap. And then the last one on this list, which is probably my second favorite one on this list, is called
00:29:25
competence withdrawal. And I feel like this one is is kind of relatively sneaky in that it ends up being a lot more
00:29:30
negative than people might otherwise assume. The competence withdrawal. So, for many of us, work provided this daily
00:29:36
experience and this this reinforcing reminder of being good at something. Right? It makes us feel good at
00:29:42
something. The feeling of competence. And that feeling of competence can be deeply motivating. So, when we retire
00:29:48
and when that feeling disappears overnight, retirees often feel deflated. That lack of daily feeling, that lack of
00:29:54
reinforcement, it leaves a hole. And now, the antidote to it is finding some new domain inside your retirement where
00:30:01
mastery is again possible. And that can connect us back, at least for today's conversation, it connects me back to
00:30:06
that whole project or contribution category, right? Bob the Builder was restoring that 1967 Mustang. And for
00:30:13
him, I hope the the act of doing that is this nice reinforcing reminder that he's
00:30:18
good at it. You know, he's a good mechanic, he's good with his hands, he thinks like an engineer. I think it's
00:30:22
important that we try to find something like that in retirement. Again, it's likely going to be a long-term project
00:30:27
or some sort of long-term committed contribution that makes you feel competent. So, with that, let's zoom out
00:30:32
for a second. We covered a lot of ground today, mainly identity, relationships, and routine. And I want to name
00:30:38
something more explicitly before before close, because I think it's easy to walk
00:30:41
away from a conversation like this and file it under some sort of category that's like soft stuff to think about
00:30:47
later. Cuz candidly, that that's probably what I would do, at least as I sit here at again age 36. I'd probably
00:30:52
say, "My retirement identity and my retirement relationships and my retirement routine are all problems for
00:30:59
another day. Those are all problems for a future Jesse to figure out." So, my challenge to you, especially if you
00:31:05
think to yourself that you're within, I don't know, 10 years of retirement, or if you're retired, you know, you're
00:31:09
actually retired. My challenge to you is don't do that. Don't do what Jesse would
00:31:13
do and and put it off for the future. So, while these might be soft topics, they're legitimate retirement risks,
00:31:19
just like sequence of returns risk and healthcare risk and inflation risk. The difference is that they don't show up in
00:31:24
a spreadsheet and and you can't really measure them in numbers, and they certainly don't get the same kind of
00:31:29
planning attention that we're used to to thinking about from a financial planning
00:31:32
point of view. And yeah, that's a mistake. I mean, first off, it's easy because when whenever we can't quantify
00:31:38
something, it's easy to say, "How can I put it in a spreadsheet? I can't quantify it." But still, it's it's a
00:31:43
mistake to ignore these things because the research is unambiguous. The retirees who struggle aren't usually the
00:31:49
ones who ran out of money. They're the ones who ran out of purpose or connection or structure. So, let me
00:31:54
quickly review those three exercises today in 60 seconds to leave you off with those kind of top of mind,
00:31:59
especially if you kind of put them off earlier in the episode. Here they are for you again. The first exercise was to
00:32:04
write your retirement bio, a genuine answer to the question, "Who are you right now without your job title?" A
00:32:10
good retirement bio answers three big things: what you care about, how you spend your time,
00:32:16
and what you're building or contributing to. The second exercise is to start deliberately investing in friendships
00:32:22
and communities that exist completely outside of work. It might mean getting serious about a recurring activity, like
00:32:27
a weekly tennis game or a book club or a volunteer commitment, as something that
00:32:30
puts you in repeated contact with the same people over time. So, remember, proximity and repetition, it's a great
00:32:36
formula for building friendships. You're just creating it or recreating it intentionally via your chosen activities
00:32:43
instead of incidentally or accidentally through work. And the third exercise is to draft that weekly retirement rhythm,
00:32:50
that template for what your week looks like. And again, I just thought of four different categories that I think are
00:32:54
helpful, and they were a morning routine, a physical activity or multiple physical activities, social commitments,
00:33:01
and then the fourth one was that long-term project or contribution. Again, the retirement bio for identity,
00:33:06
the friendships and community for relationships, and the template, the weekly template for routine and
00:33:11
structure. It's okay to make these documents living documents again, living drafts, because
00:33:15
again, we know a lot can change between now and your retirement, but you want to
00:33:18
start thinking about it today. So, think about what we covered today as three legs of a stool, right? Identity gives
00:33:24
you a sense of who you are in the next chapter in your retirement, and relationships give you the people to
00:33:28
share it with, and routine gives you some container that holds it all together. But if you pull out any one of
00:33:33
those legs of the stool, the whole thing maybe starts to topple over, lose some stability. And that's again, regardless
00:33:38
of how your portfolio is performing or how tax-efficient your withdrawals have been. None of these things today,
00:33:45
identity, relationships, and structure, weekly structure, I mean, none of them happen automatically. It requires you to
00:33:50
build it. They require you to build them yourself, intentionally, ideally in advance before you need them, but hey,
00:33:56
worst-case is you build them once you're already retired and you realize there's
00:33:59
a hole there. So, that is some real retirement planning for you right there. The numbers alone maybe get you to the
00:34:05
starting line of retirement, but today's episode, I hope, will help you actually
00:34:09
run the race. So, if this episode resonated with you, I'd love to hear from you. I'd love to hear that
00:34:14
feedback. Please send me an email to [email protected] or leave a a review on Apple Podcast or
00:34:19
share this episode with someone who maybe is two or five or 10 years out from retirement themselves, but hasn't
00:34:24
started thinking about these topics yet, because that person probably needs to hear it from you more than they know.
00:34:30
And thank you as always for listening to Personal Finance for Long-Term Investors.
00:34:33
>> Thanks for tuning in to this episode of Personal Finance for Long-Term Investors. If you have a question for
00:34:39
Jesse to answer on a future episode, send him an email over at his blog, The Best Interest. His email address is
00:34:46
[email protected]. Again, that's [email protected]. Did you enjoy the show? Subscribe, rate,
00:34:54
and review the podcast wherever you listen. This helps others find the show and invest in knowledge for themselves.
00:35:01
>> And we really appreciate it. >> We'll catch you on the next episode of Personal Finance for Long-Term
00:35:06
Investors. Personal Finance for Long-Term Investors is a personal podcast meant for education and
00:35:12
entertainment. It should not be taken as financial advice and it's not prescriptive of your financial
00:35:17
situation.