Before retiring, answer a few important questions. For instance, what makes you happy?

As America celebrates its Independence Day, it reminds me of the question clients and friends are asking during the pandemic: “Can I still retire?”

Translated, when is my financial independence day?

Many of these folks were planning to retire in the next 12 to 18 months and wonder how the COVID-19 crisis affects their plans.

The answer, one of our favorites as a financial planner, is “it depends.” Every situation is unique. It is not simply, “What’s my number?” It’s more about your lifestyle, your aspirations, dreams and your resources.

Our society reinforces the idea of retirement as a life goal. When people cite retirement as a goal, we ask, “What will you do in retirement?” Most often that question is met with dead silence, blank stares or “have fun” as the response.

Sadly, we spend more time planning a two-week vacation than we do planning how we will spend our time in retirement. The first question to consider is: What am I retiring to, not retiring from?

I know it might be hard when you are busy in your primary career to think about what’s next. Yet it’s an important starting point to spend some time, perhaps on weekends or stay-cations this summer, to start designing your life in retirement.

Remember that definitions of retiring include “withdrawing” and “removing from use/service.” Is that really your goal?

We use multiple exercises to help clients begin to design their life in retirement. Key questions to consider include “How will I spend my time?” “Where will I live?” “What are my priorities?”

Break this next phase into 5- or 10-year increments. Typically, health deteriorates as you age and you want to make sure your aspirations that include physical capability are done sooner rather than later.

Three great exercises are life balance wheel, happiness pyramid and ideal day/week.

▪ Balance wheel challenges you to think broadly about various facets of life. This includes facets like recreation, community, spirituality, wellness, family/friends and intellectual challenge. The balance wheel has you rank the importance of these facets and your satisfaction in each. It helps show gaps you might want to explore to build a “balanced life.”

▪ The Happiness Pyramid1 is built on three types of activities: pleasant, engaging and meaningful. The premise is that if you have activities in all three areas you will be happier.

Pleasant activities are those that are fun. Think hobbies and recreation.

Engaging are activities that engross you, where the hours fly by. Maybe it’s gardening or woodworking or painting.

Lastly, meaningful activities give you a broader purpose, beyond yourself. Perhaps it’s volunteering for causes you care about. One client loved being a crossing guard for his neighborhood grade school.

▪ Once you are no longer working, you probably have up to 16 waking hours a day. How will you fill them? After you’ve spent some time on the previous exercises, put together what your ideal week looks like. You can extend this to a month to include things like travel throughout the year.

We, like most other Certified Financial Planner practitioners, utilize software to put numbers to your lifestyle. Until you design or at least outline your life in financial independence, you can’t quantify and understand if your long-term plan still works. Software then allows for modifying assumptions and what-if scenarios.

If your long-term plan isn’t quite working given the current situation, there are levers you control that might increase the probability of success of your plan. Perhaps you need to work one year longer or work part-time for a couple of years or modify some of your goals. This involves priorities and trade-offs, which are unique to each person or couple.

As you celebrate our nation’s Independence, take some time to envision what your financial independence looks like. Then test to see how close you are to entering this phase.

Joni Lindquist is a Certified Financial Planner professional and a member of the Financial Planning Association of Greater Kansas City. She is a Principal with Aspyre Wealth Partners, where she helps clients Master What’s Next, integrating their career, life and money.