Retirement can be a scary proposition, but it doesn’t have to be

Posted by Rick Fine on October 29, 2015

As Halloween approaches, one is reminded of all the scary things that lurk in the shadows. Fortunately, most people over the age of six know that ghosts and goblins are merely figments of our imagination, not to mention opportunities to accumulate delicious treats. However, for some adults, there is one potential goblin that is very real and hard to ignore. It is called Retirement. When it is far enough away, it looks and sounds like a beautiful siren shimmering in the distance and softly calling out our name. As Retirement gets closer, however, warts can start to appear on that siren’s face, and her voice can become shriller for those who have not adequately prepared for the transition.

Why is Retirement a scary proposition for some? There are two main reasons. Each can be loosely characterized by one word: Personal and Financial. In next month’s newsletter, I will address the financial aspects of transitioning into retirement.

Leaving the numbers aside for the moment, many soon-to-be-retirees spend much more time thinking about the life they want to leave behind (long hours, the stress, the commute, a lousy boss) than the life they will eventually replace it with. It stands to reason that having no daily structure, doing nothing particularly meaningful, has a short shelf life for retirees (and anyone else, for that matter). After the Retirement “honeymoon” is over (figure three months to a year, on average) retirees who lack a new purpose – something to get them up in the morning and make them feel personally fulfilled – often become lethargic and bored. Social isolation can lead to depression if they do not replace their dwindling professional network with a social one.

Yet many people do not spend enough time thinking in considerable detail about how they will fill their days once they leave the workforce. This is especially true for people who have strongly identified with their jobs their entire working life but have not developed outside interests or “passionate causes” to supplement their career. People in the helping professions, such as teachers, doctors, psychologists, and clergy, can experience an even more acute loss in their sense of self-worth if they don’t ease out of their profession over time. After all, they spent their entire career serving and caring for people who needed them. Once they retire, they are suddenly no longer needed (or so they think). This can take a real toll on one’s psyche.

Inadequate planning well before the time clock has been punched for the last time can lead to anxiety just prior to Retirement, as well as an identity crisis (Who am I now? What defines me now? Who needs me now?) after the Retirement honeymoon period has come and gone. I often wonder why some of my “financially set” clients who are well into their 70’s continue to work full time and have only a vague notion of when they might fully retire. I occasionally detect a disapproving look or comment from their stay-at-home spouse during our annual reviews. Perhaps the working spouse is also concerned about how the marital relationship would change if he or she were to spend a lot more time around the house. Certainly, there is nothing wrong with continuing to do what you love at that age and getting paid for it, as long as you are not sacrificing your health or relationships. It is important, however, to be clear about the reason one continues to work, as well as to make a concerted effort to prepare for the inevitable.

A successful transition to Retirement could include one or more of the following activities: spending more time with grandchildren; part-time work (not necessarily in the same line of work); volunteering; mentoring; hobbies; education (such as adult ed.); leisure travel; membership on boards, or in clubs or organizations; starting a business; and yes, even reading in the proverbial hammock. Putting some of these activities in place before retirement can provide a “shock absorber”, if you will, when it is time to call it quits at the office. Perhaps most importantly, finding something to do in retirement that provides personal meaning and fulfillment, especially something that makes a difference in the lives of others, is perhaps the strongest predictor of a successful retirement.

If you are contemplating Retirement in the not-too-distant future, you may wish to revise your financial plan to include any of the above activities that you think will have a financial impact during retirement.

Finally, remember to exercise regularly. By keeping physically fit, it is more likely that you will be able to keep doing the activities you love to do for a very long time.