These 4 Life Events Can Ruin Your Retirement—Unless You Plan Ahead
I believe that stress reduction should be a much bigger focus throughout our lives, especially as we near retirement age. The world we live in today bombards us with near-constant information overload, and that massive stress, in turn, can lead to true clinical anxiety and even physical illness.
But well before cell phones and 24-hour news were stressing us out, scientists were studying how significant life events affected our stress levels and well-being. In the late 1960s, psychiatrists Thomas Holmes and Richard Rahe gave over 5,000 medical patients a survey of 43 major life events. Each event was weighted based on how much stress it caused, and the more stressors that respondents had experienced in the last two years, the more likely they were to become ill.
50 years later, the Holmes and Rahe Stress Inventory is still a widely-used tool. You can take the full test for yourself on the American Institute of Stress website, but today I’d like to discuss some life events that Holmes and Rahe identified as particularly stressful that can have a major impact on retirees. I think that all too often we consider stress as an unavoidable, normal part of life. So, we try to ignore it. Instead, let’s talk about these issues openly and consider some strategies that can make for a calmer and more fulfilling retirement.
Death of a spouse (#1 overall)
Nothing can really prepare you for the death of your spouse, so it’s not surprising to see this at the top of the list. The emotional effects will most likely linger for the rest of your life, and ripple throughout things like your daily routine, where you live, and how you spend your time.
One way to reduce stress from this tough life event is for you and your spouse to talk to each other ahead of time and make some plans. Talk about what you both want life to be like when one of you passes. Discuss logistics, such as if the surviving spouse would sell the family home or move closer to friends and family. Put all of your important information (bank records, wills, account passwords, etc.) into a single secure location. Let your beneficiaries know where they’ll be able to find these documents when the time comes. These steps will help you reduce the stress involved in settling your estate and make a difficult process a little easier.
Divorce (#2 overall)
Although divorce rates in America are declining, “gray divorce” among couples over 50 has more than doubled since 1990. In fact, around 25% of all divorces today involve couples 50 and over. Better health and longer life expectancy certainly contribute to those figures but so does the way that retirement has changed. Because most of us are going to live longer than our parents and grandparents, our retirements are going to be longer too. Once they stop working, couples who are used to spending 8 hours apart every day can find the changes to their individual routines and the suddenly close quarters stressful. “Retired hubby syndrome” can be a problem if one retiree spends his or her days puttering around the house aimlessly.
The best way for couples to reduce the stress that retirement can cause on their relationship is to plan for retirement together. Make sure that you’re both on the same page about what life in retirement is going to be like. Talk about the things you want to do – separately and together – and talk to your fiduciary advisor about how these plans gel with your withdrawal plan.
Major personal injury or illness (#6 overall)
As you age, your health is going to be a major factor in how you live your retirement life. Illness or injury can impact a planned “retire in place” scenario. Even if you avoid a debilitating issue, longer life expectancy could also drive up the cost of health care and prescription drugs for all Americans, creating a potential drain on your retirement assets. And if you or your spouse do fall seriously ill, navigating Medicare to make sure you have access to the care you need can create additional stress.
When you’re preparing to transition from your employer-subsidized group plan to Medicare, talk to a health care professional about your options. And make sure you take advantage of the many free preventative health care services that Medicare offers to new enrollees.
Retirement (#10 overall)
Maybe you saw this one coming, but is it really a surprise that retirement itself is a “Top 10” stressor? Marital relationships, health, money, changes to your routines, changes to your finances – there’s much more to retirement than that stereotypical image of gray-haired couples lounging on the beach!
Maybe you’ve also picked up on one of my favorite recurring themes as we’ve talked about dealing with retirement stress: plan ahead. The objective of Keen Wealth’s checklist-driven fiduciary process is to reduce our clients’ stress around financial issues so that they can focus on the life issues that are the most meaningful to them. And the more meaningful your life is in retirement, the less stressed you’re going to be.
About Bill
Bill Keen is a CHARTERED RETIREMENT PLANNING COUNSELOR℠ and independent financial advisor with more than 25 years of industry experience. As the founder and CEO of Keen Wealth Advisors, a registered investment advisory firm, he specializes in providing personalized retirement planning designed to help people thrive before and during their retirement years. With a passion for educating others, Bill regularly blogs about retirement planning, hosts the podcast Keen on Retirement, and has contributed to U.S. News and World Report, Reuters, Wall Street Journal’s Market Watch, Yahoo Finance, and other publications. Based in Overland Park, Kansas, Bill and his team work with clients throughout the greater Kansas City area and across the nation. To learn more, connect with him on LinkedIn or visit www.keenwealthadvisors.com.
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