Navigating the Emotional Aspects of Retirement: A 5-Stage Guide
This topic comes up quite often and as advisors we often find ourselves playing the role of a therapist, especially for those nearing or in retirement. Most people think being prepared for retirement means having a financial plan that has been carefully crafted and executed but that is only one piece.
The second crucial part is ensuring you are emotionally ready for this stage and all that comes with it. This step is often taken for granted. Preparing for the often-fraught period of psychological transition is just as crucial as your financial plan. Many find themselves struggling more than they thought they would, so if you are finding your retirement journey a tough one to navigate, you’re not alone.
Up to this point you probably found yourself fantasizing about what your golden years would look like but there’s also a good chance you never thought much about the psychological affect retirement might have on you. Although retirement provides so much freedom for so many, retirement often means a loss of identity. The careers we choose in life can make up a large portion of our self-worth and many derive a great deal of pride in their life’s work. Whether you identified as a chef, a teacher, specialized in a specific trade or craft, worked as a public servant in some way shape or form, or maybe you spent your career lucky enough to be an artist, retirement can cause you to question who you are now that you’re no longer working. Finally getting to that next stage of your life where you can enjoy your days doing whatever it is you want to do can quickly become intimidating if you haven’t really given much thought to what that is. You spent so much time planning and saving for these years that you never really gave much thought to what might keep you active and busy day-to-day, some even find themselves struggling with depression and anxiety after they stopped working. For many, there is now more time and less money and the psychological affects of having to train your brain to spend your retirement savings, when for the last 30 years you trained it not to can really create psychological distress, we have seen this first hand, many times.
So, if you’re in the early stages of retirement and feeling somewhat lost and even scared, you’re not alone. Many retirees find the transition can be difficult – even if they have saved more than enough to have an abundant retirement, it does not help feeling the loss of identity and the fear of excessive idle time on their hands. Here are the 5 stages you can expect to encounter and suggestions for ways to help you be better prepared:
1. Realization
When the largely anticipated date arrives and you’re ready to execute your retirement plan, you’ll likely to be flooded with mixed emotions. The day you couldn’t wait to arrive is finally here and you’re freaking out.
You find it hard to say goodbye to your co-workers that you have potentially worked with for many years, and maybe for some most of your career. The thought of not returning tomorrow now suddenly seems to really have you feeling a ton of anxiety, the income train is reaching it's final stop and it's time to tap into your savings to support your next stage of life. All of a sudden, the future is wide open and more unfamiliar than ever.
How to prepare
Firstly, you can calm down because this is completely normal. Any big change in life is going to set us back and mess with your confidence momentarily. Realize you are supposed to be feeling the jitters and this is healthy and normal.
To be best prepared for this stage, in fact as soon as you start to talk about the impending retirement date (usually 5 years out) start to think about how you will fill your time. This is a crucial and very important part of planning. Don’t over complicate how you might fill every single hour of the day, retirement is meant for you to relax and enjoy, but have a rough idea of how you are going to spend your days. What will you be doing?
If you’re not sure where to start ask yourself these questions:
- What do I enjoy doing that I’d love to spend more time doing?
- What did I dream of doing once I retired?
If you have a partner, talk about this together constantly because people change and evolve and maybe how you envisioned retirement at one point in your life looks a lot different than how you see it now. Maybe you have new dreams – communicate these to your partner. Make sure you are sharing what this looks like for you so you are both getting the most out of your new life.
2. Honeymoon period
No alarms to set, your life is full of freedom and choice. You’re enjoying your time to do whatever you want and it's absolutely incredible. Maybe you picked up a new hobby, spending more time with grandkids, enjoyed the vacation you said you would take and life is good.
How to prepare
Making the most of this period is unlikely to require too much in the way of preparation. One thing to beware of though, is that if you don’t make intentional plans about how you’ll spend your time going forward, you may find yourself stuck in an unfulfilling rut down the road.
So, while you’re enjoying your first few weeks or months of freedom, be sure to think about the long term.
Rather than fleeting from one day to the next with no clear plan, set up goals that you might want to achieve for the year. A clear sense of purpose can help provide a clear sense of direction that you can use to guide how you spend your time.
3. Disenchantment
This is when the novelty of retirement might start to wear off. You may find yourself feeling bored, lacking direction, ambition and discipline and possibly suffer from a sense of depression.
How to prepare
Retirement plans don’t have to be static; they can and should change. Recognize when things are getting stale and switch them up. A large part of retirement is self-discipline a form of behaviour we didn’t really need to access to go to work every day, if you didn’t show up you no longer had a job. The next phase is a long one. Make new plans and set new goals for yourself. Find a new social group to expand your friendship circle, take up a new hobby or find a fresh challenge.
Start a book club, think outside the box of what your easy go to hobbies might be. If you find yourself travelling more, learn a new language to bring a fun challenge to your next trip. This will keep things interesting and exciting. Even if you’re not fond of the idea, force yourself to try new things. You never know what might stick.
4. Reorientation
This is when you may find you’re ready to make some adjustments to what your retirement looks like to improve your happiness and fulfilment. You may decide as many do that being retired full-time just doesn’t suite you and you decide to take on some part-time or consultancy work where you get to pick and choose the projects you work on. Maybe you want to volunteer your time and get involved in a charity or local initiative.
How to prepare
Don’t deny yourself time to think about what you’re passionate about. What excites and energizes you to get out of bed in the morning? Understanding this can help you avoid the sense of loss many people experience when they retire. Some even decide to return to the workforce in the smallest capacity. Many are happy working in some degree in retirement with the peace of mind knowing they don’t “have” to work, but want to. The important thing here is to follow your heart. Life is not a dress rehearsal, so do what makes you happy!
Some thinking time ahead of retirement may lead you to want to take a phased retirement.
Many employers now offer a transitionary period over several years, allowing you to work part-time and get used to having more freedom before you take the step to stop work completely.
Alternatively, you could consider taking on a consultancy role during the early stages of retirement. This gives you an opportunity to share the benefit of your experience while maintaining greater flexibility as a stepping stone to retirement.
For business owners, removing yourself from the business gradually can increase the value for sale as it operates without being so dependent on you. If you’re handing over the reins to your team, a gradual retirement can help smooth the succession process.
5. Stability
This final stage of retirement, also known as the rest of your life, is the time when you should find yourself fully adjusted and acclimatized to your new reality.
Now that you have worked your way through the rollercoaster of feelings as you adjust to the big life change, hopefully you’ll find contentment. This should allow you to relax and look forward to the rest of your retirement with confidence.