It has been said that it takes 21 days for a habit to be formed. For example, going to the gym for 21 consecutive days results in you not thinking twice about going to work out. Or taking a three week break from dessert after dinner each night will result in you saying “no, thank you” to a sugary treat.
So why are we surprised by the fact that the Covid crisis has spurred millions of Americans to leave behind their jobs and instead spend time with family, pursue hobbies and focus on their personal wellbeing?
It was Monday, March 16, 2020 when President Donald Trump announced a strict set of guidelines for Americans to follow for the next 15 days. Mostly, staying home in an effort to contain the coronavirus. As we all know, this period extended far longer than 15 days, and for many, a work from home policy continued indefinitely.
During this season, habits were formed, and experiences encountered that left many to say, “is it time for me to retire? Do I have enough money to make this career change or maybe even retire early?”
Americans have left their jobs at an alarming rate over the past several months; and the “quits rate” (the amount of people who willingly quit their jobs in a given month) remains significantly higher than pre-pandemic levels.
According to the Bureau of Labor Statistics, the quits rate in February of 2020 was 3.5 million. The quits rate in February of 2022 was 4.4 million. In 2022 the quits rates increased the most in the industries of retail trade, durable goods manufacturing and state and local government education.
It was Anthony Klotz, an associate professor of management at Texas A&M, that was credited with naming the phenomenon the “Great Resignation.” Dr. Klotz was quoted in an interview saying, “During the pandemic, we really had the time and the motivation to sit back and say ‘do I like the trajectory of my life? Am I pursuing a life that brings me well-being?’”
Personally, as an advisor who has worked in the field of retirement planning for most of my career, the number of inquiries lately on this subject has been eye opening. As a firm, we have experienced a record number of individuals reaching out to us to say, “I am ready to stop working at my current employer and want to develop a plan of transition.”
The transition they are generally referring to is full retirement, semi-retirement, or simply a new (and usually less demanding) career. Many of our clients who are executives have requested to revisit their plans and possibly leave the workforce earlier than anticipated. They are interested in taking advantage of the retirement benefits of their company and seeing if now is the time to exit and spend more time with family and on activities they enjoy.
So, what may be the long-term effect of this season of retirement and transition? My response to many of these individuals is a request I made of them at the beginning of their planning stages: “paint me a picture of what retirement looks like for you personally.” This statement and its response allow me, as their financial planner, to understand the expenses that may result from the client’s decision to leave employment.
For example, some will travel more, take on a new hobby, or become a caretaker of a parent. What this request really does is encourage my client to look into the future and visualize what it would be like to not get up early, be somewhere at a set time, and be responsible for making daily decisions at their place of employment.
They will also need to consider that the work friendships they’ve developed over the years will most likely be changing. They will need to be intentional about connecting with new people and finding outlets to socialize. For many, their work has been their identity – a place where they found significance.
My purpose in asking the question is to get the potential retiree to not only have a plan for replacing their income, but to encourage them to map out what their daily life will look like each day. We all need significance and purpose. When we’re employed either as an executive, teacher, electrician, or business owner, we receive a great deal of meaning from what we do.
During this period of time that was much longer than 21 days of remote work, spending time away from our offices and “work family,” new opportunities have developed and new habits have been formed. Many of these activities brought us enjoyment that we hadn’t had access to in the past due to work and schedule constraints. So, it should be no surprise that many are rethinking where they want to spend their time and efforts in the future.
If I’ve noticed anything positive about this difficult life alteration we’ve all experienced, it’s that these new behaviors and habits have caused many people to take their minds off money and on to living an enriched life. Other places of enjoyment and fulfillment can be found outside of work. You can take the expertise you have developed over your career and share it with others in positive ways.
You may want to volunteer at a local hospital or teach a class at a local community college. Maybe you could mentor another business owner or serve on a corporate board. If you’ve always wanted to travel, consider getting involved with a mission trip. If you’ve loved working with kids or teaching, you can spend time with a high school high school student who may need a positive influence and some support.
As a financial planner, be assured that I will still make sure my clients have a plan for replacing their income and budgeting appropriately. However, to live an enriched life with meaning? That is also a family plan worth making that should include action steps for how one will spend each day. Whatever that “that” may be for you – plan it, write it, and then go do it. You will be glad you did.
For more such details, contact Tull Financial @ 757-436-1122.