The Psychological Impact of Retiring

In a few succession planning discussions I’ve had with advisors, I’ve heard the comment, “maybe I should sell my practice and just retire!” From that comment I’d ask, “So you really want to stop working? Well, no, not really! I’d just like to have more time to enjoy my life while remaining in the business!”

I remember reading a recent Canadian Association of Retired People (CARP) study of the next retirement generation - the boomers – it found that 80% of retirees expect to work at least part-time during some of their retirement years. From that I wonder does retirement no longer mean "not working?" You might want to ask yourself, is retirement an option or a mistake?

Some important things to perhaps ask yourself are you truly ready to retire if your spouse is still working? The sitting at home waiting for your spouse to come home from work might not be your idea of enjoying retirement. Have you also considered the potential changes in your family dynamics? Recently I asked a spouse if she was looking forward to her husband’s retirement, and her reply was “not at all.” “I have my routine and enjoy our time away from each other too, so I’m concerned his retirement will disrupt all that.”

Another question to ask yourself is, will you miss working with your associates? For sure there will be a few you’re looking forward to getting away from, but you’ve spent perhaps 2-3 decades with some outstanding associates and suddenly this association stops. Another associate mentioned that “they used to value my opinion on many things when I was there, but now they don’t even tell me what’s going on anymore.” Will you miss the problem solving and the feeling of making the successes happen?
Think too of the places in the world that your business has taken you! Perhaps as a perk or opportunity that only unfolded because of your business and its success. Will you miss the travel and perks associated with your work? Will you be able to afford these luxuries when you start paying for them with after tax retirement dollars?

Have you considered the things that your practice provides you that you will now have to provide for by yourself? The tax deductible automobile expense, the lunches and private memberships, can you still maintain those in your new “current” lifestyle? Assess the impact of not only loosing your business associates, but if you have to give up your lifestyle associates too, how will that impact your retirement enjoyment?

Have you spent time contemplating what’s next? Listening to recently retired gentlemen saying that he started delivering pizza, not because he needed the income, but because he had to get “out of the house and missed the human interaction work offered, might not be what you wanted your retirement to be. But then again, I hear that Walmart is still hiring greeters!

In summary, there’s several things that you need to take into consideration before deciding to find a successor for your practice. You might want to start with your psychological impact of retiring first. From that each of us will have our own personal meaning of succession planning.