The Basis for Retirement Planning

How to substitute what work provides? About 5 years ago, I read an article by Dee Cascio “Successful Retirement Planning—Replace What Work Provides.” In the article, the acronym “WORKPROVIDES” means: Wages, Order, Relationships, Knowledge, Purpose, Recognition, Opportunity, Values, Identity, Direction, Experience and Stability. This implies that when you successfully plan to retire, you should substitute what you have been benefiting from employment namely: Wages, Order, Relationships, Knowledge, Purpose, Recognition, Opportunity, Values, Identity, Direction, Experience and Stability, in short what “WORKPROVIDES.”  I was inspired by what the words assigned to letters in the acronym meant but also their application to real life situations. For instance, what would the presence or absence of wage or salary mean to me; then what about the presence or absence of recognition, stability and so forth. Reflection on this raised more questions that called for serious engagements with peers and experts.

Thus, the need to think, plan and take action on the journey to substitute letters in the acronym “WORKPROVIDES” with meaningful words became pertinent. In fact, it made me begin on a journey to rethink my perspective about life; and to engage in activities that can be done outside of formal employment.  I noted that the earlier I understood it and took action, the better. Please reflect on what the words in the above acronym mean to you.

Here are 3 areas to consider as you reflect on what the letters in the acronym represent in your retirement journey which may occur at any time and age:

Financial Life Style: This basically rotates around your preparedness for a steady income, coupled with a cashflow and expenditure mechanism to keep you afloat. This is a critical element because the mandatory social security is inadequate to sustain anyone in retirement. This implies that saving, investing, looking for alternative sources of income and managing your expenditure are very critical at an early stage.  I have seen and experienced this myself; as your income grows, your expenditure requirements correspondingly grow; and unless there is a deliberate plan and strategy, this tends to continue as the norm. For example, if you have been earning UGX 500,000 a month and managing to survive, when the salary is raised to UGX 1,200,000, there will be an automatic increase in expenditure. The changes are normally in the following areas: accommodation, furniture and fittings, meals and many other aspects. Instead of using part of the increase to save and invest, the funds are largely consumed. The question is, suppose the income ceases to be there, what will happen? You would certainly have to find how to survive with almost no income.  Thus, the financial discipline that we build in our early working years is what we sometimes keep and carry-over into retirement. Experts advise that one needs a minimum of six months’ saving of actual expenditure to allow for reorganising and looking for alternatives in case of interruption in employment income. To keep a steady financial life style is thus the basis for saving and investing for your medium to long-term sustenance: including retirement. This is what Charles Barugahare emphasises when he avers: “slowly and consistently is the fastest way to achieve a medium-to-long term goal.”  Start with whatever you can save and invest, for the power is in your ability to do it consistently over time.

Passion and Skills. This involves personal desires and the tools required to achieve your retirement goal. Consider and think about some of the following: a) what am I passionate about that I will enjoy doing beyond formal employment. b) what gives me purpose in life. c) what skills do I need beyond the current job requirements. d) what activities do I like, do and enjoy while on leave. How can I carry these activities into retirement?

Family, Relatives, Friends, Workmates and Community relationship. Where do you invest your private time and why? This involves understanding the dynamics that we need to consider in building relationships with each of the five categories. These all serve different and unique purposes in retirement. While relationships with relatives, friends, workmates and the community are very important, your family relationship has more influence and impact on you in retirement. You need the bonding of the family more than ever before for comfort and support in retirement. If you did not give the family time, they will equally deny you time when you need it most. Chances are high that while working, reasonable time is spent with workmates, which is normal.  You are with them most of the time and you have what to talk about and follow upon. However, you need to strategically, plan your time to include nurturing very close relationships with family, friends, relatives and the community. You will discover that relationships at the workplace will significantly drop when you cease to work: the bond is always work related. It is imperative that you try to nurture and expand essential relationships with family, friends, relatives and the community that you can easily socialise with or call on when there is need and/or cause for urgent action.

Pay attention to your financial life style, passion and skills; as well as the relationship strength with family, relatives, friends, workmates and the community. On a similar note, Harry Emerson Fosdick advises: “Don’t simply retire from something; have something to retire to.” Consideration should be given to how you can substitute meanings of the words represented in the acronym “WORKPROVIDES” over time: we are all bound to retire.  Our retirement uncertainty can only be minimised if we deliberately take some time to understand the nature of the retirement challenge; and then plan and take consistent actions about it.

Charles Barugahare (PhD, FCCA) – The Co-Founder Retirement Life Hub