The six pillars of retirement

Retirement is a new chapter of your life that is unlike any other. But it can be a long, rewarding and enjoyable time.

You may well have more freedom in your retirement than at any other time in your life. That can be a wonderful thing, but it needs a bit of planning to take full advantage of that freedom.

There is a lot to think about, and it is an ongoing process, so it is useful to structure your thinking in some way. A good metaphor is to think of the six pillars that your retirement is built upon. Different people have different ideas about exactly what those pillars are (and some suggest five pillars, or seven pillars), but the basic ideas are often quite similar. Here are my six pillars

Self-reliance

As children, we start out completely reliant on our parents. As we grow up, we become more and more self-reliant. But, even as adults, we are never completely self-reliant, we will often rely on our partner, family, or friends for certain things. We also rely on the state, for example, the police if we are victims of a crime, or the benefits system if we find ourselves out of work. But, as adults, we usually try to be as self-reliant as possible, and to be there for our loved ones in the same way that they are there for us.

If we are fortunate enough to retire in reasonable health, we will continue to be self-reliant. However, as we age, our ability to do that might gradually decline. For our own sakes, and for the sake of our loved ones, it is good to try to be as independent as we can be, for as long as we can.

Financial survival

Your state of your finances in retirement will largely depend on the preparations. In the UK, you will most likely be entitled to the state pension of up to around £12,000 a year, and possibly some other state benefits depending on your situation. Many people will have an additional pension from their past employment. A defined benefit pension usually pays you a fixed amount each year, increasing with inflation. The more common type of pension is a defined contribution pension, which is a pot of money that you can spend as you like (although there can be very serious tax implications if you decide to draw out large amounts over a short time period, so always take advice before making any decisions).

By the time you retire, you can't do much to affect the total amount of money you have available, but it is up to you how you spend it. You will generally have to take account of your basic living expenses (food, bills, leisure activities, gifts, etc), and essential one-off costs (household repairs, car repairs, etc). It is worth keeping an emergency fund too, for one-off costs that you hadn't anticipated. Anything that is left over is available for you to spend how you wish. You might decide to spend some money on holidays in the early years, because you might not be able to travel as easily as you get older. But you might also keep some money for additional expenses as you get older. There is no perfect answer, but it requires careful thought.

Physical health

When we are young, we can often get away with a slightly unhealthy lifestyle. Once we get past about 60 years old, we really need to put thought and effort into maintaining our health. That includes eating healthily, maintaining a healthy body weight, a suitable amount of movement or exercise, keeping hydrated, sleeping well, and moderating unhealthy things such as alcohol consumption.

Good health isn't guaranteed as we get older, but if we look after our health, it will certainly improve our chances of staying healthy for longer.

Mental health

Mental health is also very important, of course. Without the daily routine of going to work, we need to avoid falling into a rut of doing nothing each day. That can lead to depression and is not good for anybody.

Staying socially connected is good for your mental health, and having a daily routine is also beneficial. It doesn't have to be rigid, but some kind of basic structure is good. You should also try to exercise your brain, perhaps by learning something new or doing puzzles. And maintaining your physical health, and finding meaning and purpose, all feed into your mental health.

Emotional resilience

Retirement is inevitably a time of change, and it is sometimes necessary to accept changes as part of getting older. It is a time for flexibility and to focus on what you can control rather than the things you can't.

We should try to develop healthy emotional habits, such as mindfulness and meditation, accepting the emotions we feel rather than suppressing them, and seeking support when we need it.

Purpose and meaning

Humans seek purpose and meaning, often from doing things we find worthwhile. This can take many forms, such as raising a family, developing your career, volunteering to help others, learning new things, creative pursuits, having responsibilities, or perhaps your spiritual beliefs.

It is just as important to have a sense of purpose after you retire. However, for many people, their job and family provided a big part of that during their working years. If your children have left home, and you are no longer working, that can leave a hole. The good news is, you now have time to do whatever you want. But it is important to find something to fill that void.