We spend decades dreaming of the day when life won’t be dictated by alarm clocks, commute times, meeting schedules and office politics.
Then reality sets in: Retirement can be kind of a drag. And there may be 20-plus years of it ahead of you.
While traditional retirement planning covers financial essentials, most plans won’t prepare you for the emotional challenges of post-work life.
- What’s missing from retirement? Work.
You may dread the drudgery of employment, but there’s something to be said for the structure it provides.
Work is where many people derive their sense of purpose. It can also provide framework for your days (projects, meetings, deadlines) and a sense of community (thanks to water coolers, slow elevators and happy hours).
Then one day you wake up and it’s all gone.
A good predictor of retirement dissatisfaction is if a person views retirement as an escape hatch. “It’s better to be retiring to something and not from something,” says Lisa Kirchenbauer, president of Omega Wealth Management in Arlington, Virginia.
- Pretend you’re still living off a paycheck.
The transition from building savings to drawing from savings can be stressful. Instead of receiving a regular paycheck, you’re sitting on one giant paycheck that’s supposed to sustain you for the rest of your life.
Planning can help you transition to spend-down mode. Start by creating a post-retirement budget around anticipated expenses, including quarterly taxes, health care and potential emergencies. Also think about which accounts you’ll draw from (Roth or traditional IRA, taxable brokerage account, cash savings) in order to minimize the tax hit when you start taking income from your investments.
Kirchenbauer recommends simulating a paycheck-based cash-flow system in retirement by setting up monthly transfers from an IRA (or other retirement account) into a checking account. This also helps prevent blowing through your cash too quickly during the initial stages of retirement.
- Discuss the transition with loved ones
Retirement can be a major relationship disruptor. All that “me time” you and your partner had when one or both of you were at work is now potentially “we time.”
Kirchenbauer says it’s important to have a series of conversations with your spouse about whether you will retire at the same time. Retirement can be especially stressful if one partner retires before the other. If you’re prepared to be flexible, respectful and understanding of the other person’s perspective, you can achieve peaceful coexistence in retirement.
- People who have pursuits outside of their professional life tend to fare better in retirement. If you’re not interested in taking up a new hobby, consider ways to use the professional expertise you’ve cultivated over the years. It’s even better for the psyche to apply your talents to serve a cause that you care about. Don’t wait until you retire to explore new pursuits. Test-drive volunteer opportunities in your community before retirement.