How to avoid Retirement Anxiety
Some people think everyone is counting down the days until they can leave the workforce – that the last walk out of your workplace is the greatest day of your life. But in our experience, many clients find the idea of transitioning into retirement a major challenge. The reasons why are many, from a fear of irrelevancy to uncertainty about what they will do with their time.
We have organised for people like Barry LaValley to talk to our clients about what makes a good retirement - https://loricapartners.com.au/insights/a-good-retirement-is-not-about-the-money. We are always reading articles and papers on retirement, so we have collated some more ideas to share to help people navigate this major life transition.
The Power of Disempowerment
You have been working for 30 to 50 years and have felt like a genuinely productive member of society. You then step away from what is likely the height of your career accomplishments, peak earnings, and maximum saving years.
“Lifetime habits of discipline and prudence aren’t easily dismissed just because you reach what you’re told is a different ‘stage’ of life,” says Dr. Brian Portnoy. “Habits are part of our identity, and each of us defends our identity fiercely.”
Remember what Dylan Thomas wrote:
Do not go gentle into that good night.
Rage, rage against the dying of the light.
Purpose
At any stage of life, we all need to have a purpose. Once retired, your new identity will be tied to the meaningful things you choose to do. It might be volunteering, helping family or a hobby. To give a sense of purpose, a retirement hobby must be something you feel you’re good at, find challenging and fulfilling, and which strikes you as important.
Avoiding Irrelevancy
How to avoid irrelevancy should be at the top of the list of retirement goals. Here are some hard questions you need to ask yourself before calling it quits.
Are you ready to say I’m retired when somebody asks what you do?
Are your hobbies purposeful or just a way to fill a void in your day?
Can you function without the predictable structure of work rhythm?
Do you have sufficient friends outside of the workplace?
Are you ready to have people cut you off because you no longer occupy a position of power? (It does happen)
Taking the Power Back
The road to confidence in retirement is going to be different for each individual and family.
From a mental, physical, and financial perspective, there is a strong case for phasing into retirement. Financially, the benefits are many. Physically, you are more active for longer, and mentally, your identity shift becomes more of a journey than a cliff dive.
Even if you choose or are forced to give up a job, some form of work may still be the key to a healthy retirement. It can be helpful to continue to set annual goals, even if the goals are to visit each of the grandchildren at university, craft a vacation for the extended family, or lead a study at church — it’s less important what these goals are than why you pursue them.
Structure
Saying farewell to the working week’s predictable rhythm can leave some people feeling lost and unsure how to allocate their time, even if there is plenty they want to do. Many people settle into a new routine not unlike their old workweek. Indeed, many retirees say weekends continue to feel distinctly different to weekdays. You may experience some uncomfortable weeks of months finding your new rhythm but give it time.
Life does not follow a linear path
Many baby boomers believe that life has three major chapters: Get an education; get a job and get married; and retire and enjoy the downtime.
But life is much more elastic than that. People in their 60s and 70s start new careers and new relationships all the time, and young people can achieve a life of balance before age 65.
Don’t wait for retirement to live the life you want. Tomorrow is never guaranteed, so take time to do activities you enjoy every day.
Old dogs can learn new tricks
As children, we are so curious. As we get older, we can stop asking questions. The brain is a muscle that needs exercise. Learning helps us feel engaged with the world, and it’s good for brain health and memory. Dive deep into things that you’re interested in.
It is OK to think about death.
Benedictine monks are encouraged to “keep death daily before your eyes,” so that they can live life more fully and in a detached manner. Some people find that remembering death can come at any time eliminates mindless pursuits and worries and allows you to be more present and do more things that are important to you.
Build an Investment Portfolio designed for Retirement
The transition from accumulation to decumulation can cause anxiety for many retirees. In the past any financial missteps could be overcome because they had the time, income, and savings to make up for their indiscretions. This capacity is now gone.
I make a point to tell a client who is leaving the workforce that since World War 2, on average the stockmarket has fallen by 20% or more every 6 years. So, for the remainder of their life, they may wake up 4, 5 or 6 times and see their share portfolio has fallen substantially in value.
It is important to understand this market volatility is normal. Your adviser team at Lorica Partners expects and plans for this volatility. It is why we focus on asset allocation and risk capacity so much – we want to ensure our retired clients have at least 5 to 7 years of their cashflow needs invested out of the stockmarket, so they are unlikely to ever need to sell assets in their portfolio at distressed prices.
The initial years of retirement can be one of the most stressful life transitions one can traverse. But it doesn’t have to be. Retirement can and should be a rich and purpose-filled phase of life that retirees needn’t fear.
Author: Rick Walker
Source information for this article:
Scared To Spend: Overcoming The Retirement Cycle Of Fear (forbes.com)
How To Avoid A "Mid" Retirement - A Teachable Moment (tonyisola.com)