Permanent Vacation is the ninth studio album by the rock band Aerosmith, released by Geffen Records on August 25, 1987. It was also the first Aerosmith album promoted by heavy music video airplay on MTV. It was the band's first truly popular album since their reunion. "Rag Doll," "Dude (Looks Like a Lady)," and "Angel" became major hits and charted in the Top 20, which helped Permanent Vacation become the band's greatest success in a decade. Permanent Vacation sold over five million copies in the U.S.
Source: Wikipedia
The album shifted the band to a pop-metal sound that they would maintain until 1993's Get a Grip, which includes the song “Amazing.” The accompanying music video for the song is known for its depiction of futuristic digital technology. The characters appear in the video as two cyberspace kids who escape to a world of virtual reality together, neither realizing the other is also in virtual reality.
Please remember that the video game and virtual reality interactions depicted in the video might seem commonplace today but were somewhat far-fetched 30 years ago. A YouTube link to the “Amazing” video is included below. (Warning: this is definitely PG13+ material).
Aerosmith - Amazing (Official Music Video)
What does all of this have to do with wealth management and planning a successful retirement? I am glad you asked. The lyrics to “Amazing” include the following passage:
That one last shot's a permanent vacation
And how high can you fly with broken wings?
Life's a journey, not a destination
And I just can't tell just what tomorrow brings
The retirement journey is often referred to as a person's Permanent Vacation, just like the Aerosmith album title. Unfortunately, a recent paper from Hartford Funds and the MIT Age Lab indicates that many people struggle with the transition from work life to retirement life or their own permanent vacation. You see, your financial life can be divided into two significant periods of time.
The first is known as the Accumulation Phase of life. This begins when we start working, saving, and accumulating the income and asset resources that we will need to live comfortably once we stop working. This phase can represent 40 years or more of a typical person's lifespan. Including the time spent in elementary school, high school, and possibly college or trade school, this routine can consume nearly 60 years of a typical person's life. During that time, we live through a repeated and structured cycle like the chart below.
Source: Hartford Funds
We then transition to the second phase of life, known as the Distribution Phase. This starts when we retire and lasts until we pass away. Many people expect this time of no work to give them the time and freedom to do whatever they want, whenever they want. However, studies show that nearly two-thirds of retirees struggle to transition from their working life to the early days of their retirement years, also known as the Honeymoon Phase of retirement.
This may seem counterintuitive since new retirees typically have the highest level of the three things they need to be able to enjoy retirement life:
· The gift of health, physical and cognitive.
· The gift of time now that they are no longer working full time.
· The gift of resources, especially if they have believed and planned carefully for their retirement years.
However, many people have not proactively planned what they are retiring to; they only know what they are retiring from. According to the folks at the MIT Age Lab, despite having high levels of the resources listed above, the Honeymoon Phase comes with transition challenges related to our routines, roles, and relationships. Let's take a brief look at each of these potential challenges.
Routines
Once you retire, you will have a lot more time on your hands. This can be an “Amazing” blessing for some, but it may create anxiety and uncertainty for others. You may enjoy the freedom, but boredom can set in if you’re unsure what to do with it. 32% of recent retirees struggle with getting used to a new and different routine. If you think about the hours you work each week, including the commute, you will realize it is a lot of time to fill.
Roles
For many people, work gives us our identity and sense of purpose. Once you stop working, you may miss that identity and sense of accomplishment. You might feel underappreciated and lost after living in the structured world of work for so many years. This can be especially true for those with managerial or leadership positions. My wife Rachel loves to tell the story about one of her former bosses, who was reminded by his wife that he was not the CEO of their household when he retired.
Relationships
When you stop working, you may miss the socializing, intellectual stimulation, and sense of accomplishment that results from collaborating on projects. Among recent retirees, 37% miss the day-to-day social interaction with co-workers. Once you retire, you will typically spend less, if any, time with co-workers and more time with your spouse.
This adjustment can strain relationships if couples don’t share similar interests or social circles. I often encourage couples to discuss what activities they will engage in separately and those they will pursue together during retirement. Talking about this in advance promotes good communication and healthy boundaries and expectations.
Making Your Permanent Vacation “Amazing”
One non-financial thing that I typically review with clients planning to retire soon is the timing of their final day of work. This is especially important for people who live in colder climates, like we do here in northeast Ohio. If you have the means to spend a few weeks to a few months in warmer temperatures when you retire, by all means, you can consider retiring at the end of the year.
However, for those who enjoy outdoor activities such as golfing, biking, hiking, gardening, or pickleball, it can be depressing to wake up in the early days of retirement and realize that it is dark out at 7:30 AM and get dark again before 5:00 PM. It is also challenging to pursue those activities when it is below 30° and gray and cloudy from November through April. I have found that encouraging clients to retire on May 1st or June 1st allows them to retire into sunnier skies and better weather. It helps align their activities with their retirement expectations, leading to a happier transition for everyone.
Source: Amazon.com
I suggest that people look at a blank weekly planner and start to visualize what activities they might pursue with this gift of time that will make life meaningful for them in this new phase of life. You can think about pursuing activities you never had time to schedule during the busyness of your working career. This could include educational endeavors, health and wellness activities, volunteering and faith-based activities, or pursuing hobbies that interest you. Creating a new routine and schedule can give you a sense of purpose and a reason to get up and keep moving every day. I have found that my clients who are busiest in retirement are also the happiest.
My retired clients often tell me that volunteering, working part-time, pursuing a new hobby or activity, or taking classes allows them to tackle new challenges, promotes a sense of confidence and accomplishment, and allows them to meet new people and create new friendships. All of these are important as you make the transition to this new phase of life, which according to the MIT Age Lab, could typically be expected to last 8000 days, or more than 20 years.
As you prepare for your Permanent Vacation, we want it to be something you look forward to and enjoy. The gift of time, the gift of health, and the gift of resources will be more meaningful if we plan in advance for an “Amazing” retirement experience. This is an important reminder for those of you nearing retirement. I want to thank the Bad Boys of Boston, who inspired the theme for today's discussion, as well as those clients who have shared their journey with me so that I can help guide others as we continue “Moving Life Forward.”
© 2024 Jesse Hurst
Senior Wealth Manager
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