Even those who have saved millions must prepare for a lifestyle adjustment.
Retirement can be surprisingly stressful. You’re trading the familiarity and stimulation of a past life for an unstructured life of redefinition. Entering retirement not only alters your financial state, but it requires a major lifestyle adjustment. But the more you plan your transition, the easier it will be.
A successful retirement is not merely measured in financial terms. Even those who retire with small fortunes can face boredom or depression and the fear of drawing down their savings too fast. How can new retirees try to calm these worries?
Two factors may help: a gradual retirement transition and some guidance from a financial professional.
An abrupt break from the workplace may be unsettling. As a hypothetical example, imagine a well-paid finance manager at an auto dealership whose personal identity is closely tied to his job. His best friends are all at the dealership. He retires, and suddenly his friends and sense of purpose are absent. He didn’t prepare for the abrupt change to his lifestyle his retirement demanded of him.
On the other hand, if he prepares for retirement years in advance of his farewell party by exploring an encore career, engaging in varieties of self-employment, or volunteering, he can retire with something promising ahead of him. If he broadens the scope of his social life, so that he can see friends and family regularly and interact with both older and younger people in different settings, his retirement may also become more enjoyable.
Ask yourself these following questions recommended by psychotherapist Tessa Albert Warschaw to help you judge how prepared you are.1
- What will you miss from work? The challenges? The social life? Your authority?
- Will not working make you feel less vital?
- Do you have an agenda for filling your time with your choice of hobbies and interests?
- What will make you rise each day as excited as you were at the high points of your career?
- What ambitions are you waiting to fulfill?
- How do you think your being around the home more will affect your partner, if you have one? What does your partner think?
Financial anxiety is a common outcome of retirement. It relates to the fact of no longer earning a conventional paycheck. You see it in couples who have $60,000 saved for retirement; you see it in couples who have $6 million saved for retirement. Their retirement strategies are about to be tested, in real time. All that careful preparation is ready to come to fruition, but there are always unknowns.
Some retirees are afraid to spend. They fear spending too much too soon. With help from a financial professional, they can create a strategy.
Face your retirement with foresight and dedication. Preparing for your retirement can help ease the transition from your past lifestyle to your new one.