For some retirees, the happiest times of their lives were spent during their working years. There were uphill and downhill moments, but it was a time that they enjoyed the company of family and had co-workers to interact with on a daily basis.

Years were spent working to achieve the organisations’ goals and aiding the employers’ dreams of a better future. Little thought was given to planning for the years when colleagues and children are not there, and pay cheques stopped but the bills keep coming.

The Harvard Study of Adult Development showed that the biggest challenge people encountered in retirement is the loss of the social connection they had in the workplace. Planning for retirement, therefore, ought to be a holistic process encompassing physical, financial, spiritual, and social needs.

Recently I had discussions with retirees, who regretted the choices they made because they now live with the consequences of their actions, and have to make the best of the situation they now find themselves. A distressed retiree shared that she is 62 years old, but her employers recommended that she be retired at age 61. She regretted the small monthly contributions she made to her pensions over the years. The pension contributions were invested in an approved personal pension plan with normal retirement at age 65. She will only receive a small lump sum payment as the accumulated amount is much too small to provide a monthly pension for the rest of her life. All her life she was a low-income earner and pension payments were made through salary deductions. She became a member of a pension plan late in life. Though encouraged by her employers to increase her contributions, she maintained the minimum payments. Without a current income, she has decided to access her pension funds instead of waiting until age 65. Her daughter is now the breadwinner of the household. It’s never the amount you earn, but how much you save and invest and for how long. Small amounts compound with time. There are retirees who earned lucrative incomes yet struggle in retirement to maintain the lifestyle they once had.

Another retiree owns a rental property and receives a monthly pension. But upon close analysis, this retiree is house-rich but cash poor. All her money was invested in real estate. The drawback was, she had insufficient emergency funds. I recommended that she invests a percentage of the rental income on a monthly basis. Property maintenance can prove costly as the years go by and emergencies can happen at any time. Last year, an 82-year-old retired client was able to access $2.5 million from her equity account to repair the roof of her dwelling. Because she planned her retirement future and invested wisely, she was able to make an investment in her home during declines in the stock market. Hard times will come. Stock markets will decline, but a diversified investment strategy consisting of stocks, bonds, and a monthly pension saw her reaping the benefits from her equity account because of the buffer it provided in a crisis; after investing in a managed fund for over 12 years. Experience is the greatest teacher and this retiree’s long-term investment has rebounded tremendously after suffering stock market losses early in the investment journey. She has grown in knowledge and understanding of the market that equity is an inflation beater and the risks get less with time. When you are able to keep the roof over your head in old age, it ensures that you are not robbed of the joy and comfort that retirement should bring.

It’s so important to start investing early. A pre-retiree recently lamented that she had too many insurance policies and little disposable income. A balanced and diversified financial portfolio is required. Divorce, separation, and death can also rob you of resources and precious time with your loved ones. Life insurance, health insurance, and estate planning are a few of the elements of retirement planning. But it’s not only the lack of financial resources that can create anxiety for retirees. Trying to figure out what to do with the years ahead can be intimidating for some people and finding or fulfilling one’s purpose in life can bring much happiness and even extra earnings in retirement.

If you are a working adult or pre-retiree don’t just focus on the financial investment, but treasure the relationships, and the people that add value to your life. Start a life of volunteerism before retirement. Your training, experience, knowledge, and talents are valuable assets that you should not discount. Retirement brings the opportunity for meaningful contribution. According to an old Greek phrase “A society grows great when old men plant trees, whose shade they know they will never sit in”.

Grace G McLean is financial advisor at BPM Financial Limited. Contact her at: gmclean@bpmfinancial or visit the website: www.bpmfinancial.com. She is also a podcaster for Living Above Self. E-mail her at livingaboveself@gmail.com