Retirement Readiness:
Within One Year of Retirement


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With a year or less to go, you have a lot to think about. You are facing one of life’s most important transitions, with effects on how you live your life, your relationships with other people, perhaps for where you live, how you view yourself and your future, your physical and mental health, and, of course, your finances.

In this last category, in the coming months you will have to make some of the most complex financial decisions you have ever faced, most of them with significant consequences for your long-term prosperity and even solvency.

There is no cause for panic, of course. There is plenty of help for you, and these pages will enable you to find it.



1. What do you want your life to be like when you’re retired?

Most people in the final year of their principal life work think mostly about two questions: How can I have a good, happy, “successful” retirement? and, Will I be able to afford it?

These questions are more closely related than they seem at first. So are a variety of other questions that you might not think of right away, or that might appear not to be connected. Your life is changing, but it is still your life, which means that many kinds of things affect you - and just as importantly, affect one another.

For example: will you move when you retire? Whether you do or not, that decision has a direct impact on your finances and your quality of life. It will also affect your relationships with other people, especially if you move any distance, and depending on how your close friends and family feel about where you live. Your location also affects what activities you pursue in retirement. Distance from recreational facilities and from doctors may affect your health. Pleasant surroundings may benefit your mental and spiritual well-being, while cramped, noisy, or high-traffic surroundings can create stress and unhappiness. And those are just the more obvious, direct effects.

The same could be said about most other choices you make in the next year or two. Each area of your life affects each other area. So instead of treating these decisions as isolated choices, it's best to think of them as part of the whole person that is you, or for that matter, of your whole household.

That sounds big, and it is. A successful retirement is not any easier than a successful career. But as we break it down into pieces, it becomes simpler to grasp.

One way to look at your retirement life is with what we call the SPLASH model. This model divides all the key issues and concerns in your life into six categories, with the most fundamental ones at the bottom, and the less concrete (but arguably the most important ones) at the top. Here is what the model looks like, and a few of the key issues that relate to each area.

Spirit: What matters beyond the physical details of your life
Purpose: Activities that give meaning to your daily life
Love: Your connections to others you care about
Avocation: What else gives you joy and satisfaction
Security: Providing financial and physical shelter
Health: Taking care of your physical and mental well-being

    Spirit: What matters beyond the physical details of your life
  • What is the meaning of life, and of your particular life?
  • How do you connect with whatever religious, spiritual, or other reality you believe in?
  • Are you prepared to deal with aging and death, in yourself and those you care about?
    Purpose: Activities that give meaning to your daily life
  • Should you be doing paid or volunteer work in retirement?
  • How do you engage productively and satisfyingly with your community, the nation, or the world at large?
  • What legacy do you want to leave behind?
    Love: Your connections to others you care about
  • How to make the most of your marriage (or relationship with another kind of life partner or significant other)
  • How do you develop and maintain solid relationships with other family and friends?
  • How do you manage when care-giving is required?
    Avocation: What else gives you joy and satisfaction
  • What leisure activities make sense for you now?
  • What opportunities should you take to continue to improve and exercise your mind?
  • How do you maintain your lifestyle as you age, and as you become less physically or mentally adept?
    Security: Providing financial and physical shelter
  • What financial decisions need to be made to assure you of continued means to live as you wish?
  • Where and in what kind of domicile should you live, and how do you maintain it as you get older?
  • What legal or financial steps should you take to prepare for incapacity or death?
    Health: Taking care of your physical and mental well-being
  • What should you be doing in the way of exercise, nutrition, and sleep?
  • What medical professionals should you consult, and what kinds of medications or therapies should you be using?
  • What can you do to fight off harmful attitudes, feelings, and habits, and to promote happiness and wellbeing?

Click any of the six main topic areas Spirit, Purpose, Love, Avocation, Security, or Health – or better yet, try them each in turn, to explore in more detail the specifics of what each is, and why they all matter. As you may already realize, some of the items listed above could fit into more than one category. This is unavoidable: Life does not actually fit into neat boxes. The intention here is to cover all the key areas in one place or another, and as you visit each section, we will explain the main connections to the other sections.



2. What is your overall financial situation, and what key financial decisions should you make?

All of the issues in the previous section are important, but as we get closer to retirement, we usually want to be confident that, first and foremost, our financial security is reasonably assured. Once we have that settled, most of us tend to feel that we can figure out everything else.

This is a valid and even necessary approach for most people. Although you can’t make all of your financial decisions until you know, for example, where you’re going to live and what you’re going to do and how much money you’ll make (or spend) as you shift into retirement, you also can’t make those decisions until you have a sense of your overall financial situation. So we have the makings of a vicious circle.

The best way to break out of this is to use a detailed model to see what your current financial situation is, and then how it would change depending on what other decisions you make.

This sounds tricky – and it could be tricky indeed. But fortunately, there is an excellent planning tool available that does just this job, and it has been specifically built for people in your situation. It may take you two or three hours to work through it, possibly even more, but that's because it's thorough, not because it's difficult. If you are the person in your family who handles the finances, this is something you can do yourself, yet it is better than what all but the most expensive personal financial planners can do for you.



3. What specific steps should you be taking as your last year of service with your employer rolls along?

One Year before retirement

Six Months before retirement

Three Months before retirement

One Month before retirement