All three matter.
The idea of retirement is exciting. To the average American, retirement is a goal they strive toward each day of their working life. Most of the emphasis is on the financial facts of retirement. Many are missing the critical component to making their retirement a smooth and happy one.
Read: You’ve spent decades saving money for retirement. Now comes the hard part — spending it.
The way to ease into retirement is to prime yourself for the emotional and social changes that will be inevitable. The reality of retirement is a surprise to some retirees. And it shouldn’t be surprising, retirement is one of the most stressful of life events. On the Holmes-Rahe Life Stress inventory, retirement is rated number 10.
As such a large stressor, no wonder why new retirees are more likely to have a stroke or heart attack than their working peers, according to the Harvard School of Public Health. The study concluded the risk is 40% higher during the first year of retirement.
Read: At 65, I thought I could eat whatever I wanted — until I woke up in the ICU
Whether this effect is from the adjustments in retirement, the result of declining health requiring a retirement, or just part of aging, the fact remains that retirement is stressful. And during our older years we face more challenges in the form of not only retirement, but also relocation and loss of a life partner through death. These are stressful events on their own but when many come at once and there is no support system, the results may be depression, death, or other troubling life circumstances.
Even strong couples may need guidance as this new stressor creates cracks in their relationships. After the routine of spending days apart, the togetherness may be challenging. Some couples retire together expecting “wedded bliss” and find that the first year of retirement is hardest on a relationship.
Read: What retirement? Older adults are working more hours for higher pay than in the past.
Retirement is a lifestyle
With retirement considered a goal, little attention is given to the other side of the goal. Retirement is a new stage in life complete with an adjusted lifestyle. Knowing the answers to these questions will allow some creative thinking about your post-work life:
· What is a retirement lifestyle?
· What will motivate me every day?
· Who will I talk to?
· How will I fill my day?
· What routines can I start to support a healthy life?
Loss of identity
Retirement can be an especially difficult transition for those who have defined themselves by their work. With retirement there are such losses: loss of a schedule, a routine, loss of co-workers, and daily connections. The biggest loss is the goal you worked all your life to achieve: a productive career.
“Post retirement life is a time of redefining yourself, redefining even what success means to you,” Mary Bell Carlson, Ph.D., CFP, AFC, president of Financial Behavior Keynote Group explains. “Retirement is just the opposite of what you have done for the past 40 years…sometimes, we take for granted relationships and bonds that come from that experience.”
If you are goal oriented, readjusting and finding a new goal may take some time. As Carlson mentioned, you may revisit so much of life from social connections to activities. This transition is internal as well as external.
To prepare for this shift, think ahead and ask yourself:
· How have I handled transition in the past?
· Who else do I know that is retired that I can talk to honestly?
· Who is my post work support and social team?
· What interests have I been wanting to try?
Practice retirement
Those who have been singularly concentrating on building retirement funds without considering the reality of day-to-day life changes in retirement may be most in danger. They need to test some of their future activities preretirement.
Waiting to do a host of activities during retirement sounds wonderful. However, unless you “practice retirement” and understand what travel means to you or how an RV lifestyle fits for you and your partner or what hobby really engages you today, your first year of retirement could be a cycle of misfits and frustration. You may find that those long-term goals come crashing in quickly after your retirement, because they were dreams rather than a good fit for you. Better to sample extended time off, overseas vacations and perfect some hobbies rather than waiting until you have time in retirement. That way you have a realistic plan for your activities, not some big experiment of time, energy, and money.
Read: ‘Retirement security is under threat’: More people are raiding retirement savings to pay bills
Mentally adjusting to spending lifelong investments
After decades of saving, using retirement funds is often a stumbling block. Those “hyper focused” on the math of retirement often forget about why these funds exist. There are pending retirees who delay retirement due to being overly reliant on financial data. They want to be sure to have enough money, they question every expense and wonder about extending the timeline as it gets closer. The real truth is that they are stressed about such a large change in their life. They cannot control: the stock market, inflation, and the economy. By doing this, they fail to take care of what they can control – their expectations, planning and daily activities post transition.
Others overly focus on the money and do not want to take any out, despite this money being earmarked for retirement. Unreasonable emotions come into play including one 80-year-old who would not touch her mutual funds because they were “for her old age.”
“After career long mental accounting of putting money in their retirement plan,” Carlson says, “Retirees may be in shock or at the very least, think twice about withdrawing money when retirement arrives. Their tendency and training is to save so they become less likely to want to spend it. “
“After years of saving,“ Bell Carlson says, people find it a “difficult thought process to flip a switch” and make this change.
Retirement as a three-part process
Retirement is not simply a target-date goal; the retirement years are a process. Within this part of life there tends to be three stages.
First, the freshly retired who are active and getting established in this exciting new part of life. They may be spending more on hobbies, moving, travel or a new camper.
The second stage is a status quo and settling into the new lifestyle. As they already have the new tractor and home improvements, they spend a bit less money on major purchases. They may have some medical bills or once-in-a-lifetime trip expenses, but the pace is relaxed, financially and emotionally.
The third stage is more evident slowing down. Even if good health prevails, there may be more spending for help caring for the home. Or a major move.
These stages are not perfect or the path for everyone but be aware that retirement is a process requiring emotional adjustment and change like any life stage. Knowing what supports you along the way is key to your quality of life.
Read: Retirement isn’t a destination — it’s a journey with three key stops.
Even medical geriatric specialists are aware that more than money makes for a happy retirement. Understanding and dealing with health issues and finances are key. And so is having rewarding activities and relationships. They encourage retirees to forge a new social network, keep learning, being creative and play at your favorite activities whether golf, ballroom dancing or traveling. Retirement is not a detriment to your well-being if you are active and engaged.
Create a fulfilling and rewarding retirement by starting now. Think about other ways to define yourself beyond work, so when the time comes you will ease into the retirement years with a sense of adventure, self-knowledge, and your finances in place.
When you know the many aspects of retirement, including the emotional, mental, and physical, your understanding of your retirement will be well rounded. With these essential components of life in place, you are ensuring a successful retirement lifestyle in the years ahead.
CD Moriarty, CFP, is a Vermont-based financial speaker, writer and coach who wants to create financial peace of mind for others. She can be found at MoneyPeace.com.
