Liz Weston: How to create your retirement glide path

In investment terms, a “glide path” describes how a mix of investments changes over time. Typically, the mix becomes more conservative (fewer stocks and more bonds, for example) as the investor approaches a goal such as retirement.

You can also create a path to retirement by making gradual changes in your work and personal life in the months or years before you plan to leave work. Retirement can be a jarring transition, especially if you haven’t established ways to replace the structure, sense of purpose, and socializing opportunities that work can bring, says financial coach Saundra Davis, CEO of Sage Financial Solutions, an organization of nonprofit financial education and planning organization in San Francisco.

“People are excited to leave (work), but once they leave, they feel the pressure of, ‘How do I define myself?'” Davis says. “‘Am I important now that I’m no longer at work?'”


Davis suggests that people start by thinking about what they want out of retirement. This could mean visualizing your ideal day: where you live, what you do, who you spend time with. Free tools like YearCompass and Unravel Your Year can help you identify what brings you joy and what you want most in your life, Davis says. These tools allow you to reflect on your recent past and plan for the future.

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“What are the things that called you? What gives you energy?” Davis asks.

Your ideal retirement may face obstacles: lack of money, illness or the need to care for someone else, for example. But understanding what you really want from this phase of your life can help you figure out ways to get what’s most important, she says.

“Just because you may have some limitations, whether they’re physical, emotional or financial, don’t assume it doesn’t matter to you,” says Davis.

Discuss your vision for retirement with your spouse or significant other to “see if you’re on the same page,” suggests David John, senior strategic policy adviser at the AARP Public Policy Institute in Washington, DC. Your partner may have different ideas about when to retire, where to live and what they want to do with their time, and these should be discussed before either of you leave work, John says.

“We tend to assume that people agree with us, when we haven’t had a formal discussion about something, and that can turn out to be a mistake,” says John.


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Some employers have phased retirement programs that allow people to reduce part-time work while maintaining a salary and benefits. Other companies don’t have formal plans, but may be willing to accommodate an employee who asks, especially if the worker is a high performer, says Joe Casey, a retired executive coach in Princeton, New Jersey, and author of “Win the Game Retirement: How to Overcome the 9 Forces Trying to Steal Your Joy

Staggered plans give employers time to find a successor while allowing workers to retire, says Melissa Shaw, a wealth management adviser at financial services firm TIAA in Palo Alto, California.

“They still have more freedom to start enjoying themselves and planning the next phase,” says Shaw. “It’s a good way to transition.”

If phased retirement isn’t an option, a part-time job or consulting job can help people keep a foot in the workforce while shaping their post-work life, Shaw adds.


Loneliness doesn’t just decrease the quality of your days, it can also decrease the quantity. According to the Centers for Disease Control and Prevention, social isolation and loneliness significantly increase someone’s odds of premature death and are associated with a 50% higher risk of dementia, as well as higher rates of depression, anxiety and suicide.

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Many people underestimate the social connections that work provides, Davis says. They also may not anticipate how much their social circles may shrink over time as people move away or die. Davis recommends making friends of different generations to counteract that tendency. Hobbies and volunteering are among the ways to find potential friendships, she says.

But it can also help to find friends or mentors among people who have retired, says Shaw. Senior centers, social networking sites like Meetup, and the AARP Foundation’s Connect2Affect service are other ways to find potential social contacts. One of Shaw’s clients connected with a group of retirees at a gym before he retired, combining his desire to stay active and healthy with an informal support group, Shaw says.

“Having others around you who have experienced retirement and can provide support and advice and share ideas is invaluable,” says Shaw.


This column was provided to The Associated Press by the personal finance site NerdWallet. The content is for educational and informational purposes and does not constitute investment advice. Liz Weston is a NerdWallet columnist, certified financial planner, and author of “Your Credit Score.” Email: [email protected] Twitter: @lizweston.


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