In the run-up to retirement, many folks are very focused on how their finances are going to change. But as you're working on an annual withdrawal strategy, reconsidering your monthly budget, and preparing to transition to Medicare, it can be easy to overlook how retirement will impact you psychologically and emotionally. And, unlike clocking out on that last day of work, the way your thoughts and feelings change in retirement most likely won't be a "one-and-done" experience. It's likely that you'll go through many ups and downs as you progress through these five stages:
1. Pre-Retirement Phase
Planning for retirement might fill you with equal parts excitement and anxiety. No matter how much you're looking forward to retiring, as that date gets closer, you're also going to be more and more preoccupied with all the little details and the major decisions ahead. Or, you might be a "die with my boots on" type who feels much more anxious than excited about retirement.
Working with a financial advisor can help alleviate some of the stress that comes with transitioning away from a paycheck to living off your nest egg. Working with advisors who specialize in true comprehensive planning, like my team at Keen Wealth, can also help you to start preparing for the emotional transition of retirement. As important as financial security is, I believe that when you reach retirement age, your money is about much more than hitting a number. It's about how you're going to use your resources to make your next act, and the one after that, as fulfilling as possible. Having those conversations about Activity, Relationships, and Time is every bit as important to my team and our process as deciding when to take Social Security.
2. Honeymoon Phase
Even folks who weren't super excited about retirement usually enjoy taking a deep breath and spending some extra time with their coffee on those first few mornings when they don't have to rush out the door. While work gives us purpose, it also gives us stress: deadlines to meet, teams to manage, busy work to plow through. Retirement washes all those professional responsibilities away and leaves you with a blank canvas to play with. You might use your Honeymoon Phase to take a bit of a breather and spend some more time thinking about how you want to fill in your new schedule. Other folks go big right away and kick off retirement with a bucket list vacation. There's no right or wrong way here. What's important is that you enjoy your Honeymoon Phase as much as you can ...
3. Disenchantment Phase
... because, in my experience, there's a pretty good chance it's not going to last.
Many retirees who charge into retirement and start tackling bucket list goals turn around after a few months or a year maybe, and start wondering, "Is this it?" In a sense, they spent their Honeymoon Phase on what felt like a long vacation, even if they stuck close to home and invested themselves in sports, hobbies, or household renovations. Except, in this case, the "vacation" feeling doesn't end. There's no job to go back to, no young children to raise. Some folks might also still be grappling with a loss of identity they experienced when they stopped working. A retired engineer who misses building things and solving problems isn't going to fill that void by taking another cruise.
4. Reorientation Phase
It's here that retirees often start working towards a better balance between an "endless vacation" retirement and a more purposeful retirement. They often think about how to put professional skills to good use at this new stage of life by adding a part-time job, volunteering, or a mentorship to their schedules. This is also a phase to consider trying new activities, taking an online course to learn something new, joining a club to expand your social circle, or setting new big-picture retirement goals, like relocating or starting your own company. If your travel schedule is slowing down, you might put a renewed focus on your health and start a new exercise routine. Couples might feel like their marriage is entering a new phase and discuss things they want to do both separately and together to make retirement more fulfilling for both of them.
5. Stability Phase
I've worked with seniors who found true contentment in retirement after a few months. I've worked with some who took a couple years to settle in. And I've worked with plenty of folks who have taken one ride after another on this emotional roller coaster.
I think that as people continue to live longer and stay active later in retirement, those repeat rides are going to become more frequent. Your idea of fulfillment will probably be very different at 60 or 70 than it will be at 80, 90, or even 100. You'll face new challenges and discover new opportunities.
But one constant that can continue to support your retirement as it evolves is a solid financial plan. No matter where you are on your emotional or financial journey, Keen Wealth is ready to help you make the trip a little less bumpy and the destination more satisfying.
Bill Keen is a financial advisor with nearly 30 years of industry experience. As the founder and CEO of Keen Wealth Advisors, a registered investment advisory firm, he focuses on 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 Forbes, 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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