Life's most significant events, like getting married or going through a divorce, require a period of emotional adaptation, and retirement is no different. While several studies and analyses have delved into the emotional aspects of familial changes, the emotional landscape of retirement has largely remained unnoticed until now. Recent research indicates that the mental process of retirement mirrors the emotions affiliated with other life phases.
Retirees are met with arguably the final transition in their lifespan. This journey begins with the shift from the home's security to the independence of school life, then to the working world where weekends become a sanctuary. The final transition is retirement – a time where careers conclude and the rest of our lives begin.
"Believe it or not, letting go of a routine, even one that marginally brings us happiness, is not that easy," cautions Diane M. Manuel, CFP®, CRPC, a Financial Advisor with Urban Wealth Management in El Segundo, California. "Most routines start early in childhood-over six decades of doing the same thing. We wake up, get dressed, have lunch, go out, come home, eat, and sleep. This cycle repeats for years."
Manuel advises her clients: "Contemplate your retirement. Discuss it with friends. Write about it. Visualize it. Be creative. Your financial plans and your day-to-day retirement plan should be integrated. This is your retirement identity."
There are six distinct phases of retirement, and each one is worth understanding more deeply.
Often, retirement seems both burdensome and a far-off utopia during our working years. Workers try to save as much as they can for this phase, without considering what they will actually do once they reach this milestone. For many, retirement planning resembles a football match, dodging defenders to reach the end zone.
"Remember, life is not about the amount in your bank, but the memories you make. Therefore, focus on using your finances to enhance your life rather than letting money control your life," suggests Cooper Mitchell, a Financial Advisor with Dane Financial LLC in Springfield, Missouri.
The shortest phase in retirement is the actual cessation of employment, often marked by celebratory events. This stage can be compared to wedding ceremonies, carrying the same sense of passage. Like marriages, retirements also have honeymoons, where retirees indulge in activities that they couldn't during their working years, like traveling, pursuing hobbies, or visiting relatives.
However, just like with marriages, the honeymoon phase wears off, and retirees need to build a life in this new phase. This can lead to feelings of disappointment, loneliness, and a sense of uselessness.
Shanna Tingom, the co-founder of Heritage Financial Strategies in Gilbert, Arizona, states, "The hardest transition for many of my clients is shifting from working and saving to retirement and spending. This can be much more emotionally and financially challenging than expected. If they are early retirees, and their friends and family are still working, it can be very lonely, especially without a plan."
Tingom suggests, "A robust retirement plan comprises a financial plan, a budget, and a FUN plan! This fun plan should detail the activities they want to do, places they want to visit and how much budget is allocated for these things."
Like married couples learning to live together, retirees become familiar with their new lifestyle and adjust their lives accordingly. This transition can be challenging and requires conscious effort and time. Reflecting on questions like "Who am I now?" or "What is my purpose at this stage?" can help retirees gain a sense of closure from their working years.
A new routine is established, new rules for personal and shared time are set, and a new identity is formed. As retirees become accustomed to the new norm, they can enjoy this life phase with a renewed sense of purpose.
"When you retire, it may feel like you are on a roller coaster ride," observes Kimberly Howard, CFP®, founder of KJH Financial Services, Newton, Massachusetts. "It requires patience and attention to manage the highs and lows. In time, the new norm becomes your reality."
Planning life post-retirement is key to a smooth transition. People who have seriously thought about what they will do once they retire usually have an easier transition. It's never too early to plan out how you want to spend the rest of your life.
Like all emotional processes divided into phases, it's not necessary to entirely complete one phase before starting the next (except for ending employment, of course). All retirees will experience these stages in some form, and their ability to navigate this uncharted territory will influence how they spend the last phase of their lives.