Find a new purpose before you retire

When you think about succession planning, you may be imagining how much your book will sell for, what you’ll say to staff or how your clients might feel after the transition. You’re probably imagining the first few months of retirement, where you plan to fill your days with golf, tennis or travel.

Here’s what you may not be considering: what you’ll do in the months and years after the euphoria of time off subsides.

It’s an issue I see time and time again: Advisors give all their attention to the transition but fail to consider what they’ll do when their work life ends. If work got you out of bed every day for 40 years, what is it that will get you excited in the morning for the next phase of your life?

Every succession plan should include a purpose. If yours doesn’t, you might end up regretting the sale or end up backing out of a deal out of fear. You could also find it hard to let go, which can adversely affect how smoothly the transition will go for your clients and staff.

Don’t just take my word for it. A 2023 research paper authored by Anfal Adawi, Ida Ferrara and Sadia Malik and published in Canadian Public Policy looked at life satisfaction in retirement and found “people who like their jobs may experience sadness and a loss of purpose in their lives when they retire.” Finding that new purpose is key.

Discovering your purpose doesn’t happen overnight. It takes work and careful thought, in the same way planning for other parts of your succession does.

Based on my experience buying businesses from advisors and working with those who sell, here’s how to start.

1. Think about what really matters.

Finding purpose is more than about pursuing hobbies. You need to consider the activities that will hold your attention over time.

Start by thinking about which parts of your work you enjoy most. Is it the client relationships, solving complex problems, mentoring younger advisors or building something from scratch? Purpose in retirement often comes from putting the things that motivate you into a new context.

Next, layer in personal interests, whether it’s hobbies you haven’t had time to explore or causes you care about. This exercise will help you determine what to pursue when you’re no longer working.

2. Take an extended vacation

One way to see what retirement is like is to test it out. Consider taking a substantial amount of time off, which will not only ensure your business can run without you — a factor that buyers want to see — but it can also help you get used to a long break from work.

You might find that you fill your first couple of weeks with things you do on weekends, like watching sports or puttering around the house. But do those activities still excite you after week three? Can you see yourself doing those same things for months or years?

You might imagine yourself spending more time with family when you retire. This is a good time to test out that theory as well. See what happens when you spend more time with children and grandchildren. You might love babysitting your grandkids — or it might make you exhausted.

3. Reclaim responsibility

While leisure and social activities are important, they don’t replace the sense of responsibility you get from work. That’s why many advisors struggle — they remove all obligations from their lives at once.

Instead, do something that requires you to show up. That could be mentoring a younger advisor, joining a board, volunteering regularly or even starting a small hobby business on the side. Pick this up before you retire, so you don’t spend months finding something new to do.

4. Find your new identity

One of the difficult parts of retirement is the loss of identity that work often provides. You’re no longer the person clients rely on or the business leader making vital daily decisions. That shift can be jarring.

Think about who you want to be next and start living as that version of yourself while you’re still working. That could mean becoming a business mentor, an investor or a community leader. The earlier you start identifying with something other than work, the easier it will be to step away from your business.

5. Build structure into your life

It may sound counterintuitive, but too much freedom can be a problem. Work naturally creates structure and without it, your days can blur together quickly.

Those who have an easier transition to retirement tend to intentionally replace the structure they’re used to by maintaining regular commitments, standing responsibilities or scheduled activities that give their weeks shape.

The purpose plan

While a succession plan tends to be business-focused, you may want to write out a purpose plan that outlines your interests and the steps you’ll take to find meaning in retirement.

A list of activities —golf on Tuesday, travelling a few times a year and dinners with friends — may sound fun, but it isn’t a real plan. Finding purpose requires doing things with meaning and accountability.

Sketch out what a typical week could look like, make notes on who you might spend your time with and identify what responsibilities you want to take on.

If this seems daunting, know that you don’t need to figure out your entire retirement right away. Like any plan, one focused on purpose can evolve. What feels meaningful today may end up being different several years down the road. But do take the time to have something in place to keep you focused and moving when you don’t have your business to go to every day.