Why Some Individuals Struggle With Retirement

People fear the unknown. Are you one of them?

Think of how you felt when you started a new job. Were you a bit anxious the first time you walked into the office?

Or how about your first child? Did you wonder if you had what it takes to be a good parent?

While they didn’t totally disappear, with each new job, with each new baby, those fears grew less and less.

Look at retirement in the same way, except you probably will only do that once. If you’re like others, the thought of retirement stresses you. Ironically, once you pass the threshold and move into retirement, you’ll find life becomes easier. A recent poll shows more retirees reported they are living comfortably than non-retirees expect to live comfortably.

What’s their secret?

Why do retirees worry less about retirement than non-retirees?

Because you don’t know what retirement will represent until you actually retire, it’s only natural to grow anxious as your retirement date nears. Why does the future pose such a dilemma?

“There’s just way more uncertainty,” says Derek Sall, founder and lead of Life And My Finances in Grand Rapids, Michigan. “With fewer knowns comes greater worry. Think about it. What if I told you I was sending you on a trip? That’s it. No details. No timelines. I didn’t even tell you if you were leaving the country. That would leave you a little stressed, right? Now, what if I told you exactly where you were going, what you were doing, when you had to wake up for the airport, what you had to bring, and who you’d all meet along the way? Well, that’d be way less stressful! The same is true for retirement. Before you’re in it, there are just a ton of unknowns. But once you’ve lived it for a bit, you get to know how to manage your money, what to do each day, and how to provide yourself some happiness along the way.”


Why do people fear retirement?

It doesn’t take a rocket scientist to know the unknown tomorrow worries people today. What, specifically, causes this fear? Think of it in terms of life’s basic needs: food, clothing, and shelter. When you’re working, you have the confidence to know how you supply these essential items to yourself and your family. Retirement throws that confidence overboard.

Doug Ornstein, senior integrated solutions manager at TIAA Wealth Management in Charlotte, North Carolina, sees pre-retirees primary concerns as running out of money or losing their nest egg in the market. “This is textbook psychology,” he says. “We tend to worry more about things that are uncertain.”

It’s not just running out of money. Uncertainty also means you lack the control that makes your life predictable. Before you retire, your instinct may cause you to wonder who will be driving the car. Every imagined minor bump in the road creates a sense your life in retirement may veer off course.

“People who haven’t retired yet may feel like they have less control over their retirement than those who have already retired,” says David Johnston, managing partner at Amwell Ridge Wealth Management in Flemington, New Jersey. “They may be worried about factors such as changes in the economy or the stock market and how those factors may affect their retirement savings.”

There’s another thing that causes you to struggle in retirement: people. Specifically, the lack thereof. When you’re working, you have a certain social consistency. You go to your job every day and see familiar faces. With the prospect of retirement comes the realization that those faces will disappear. What (or who) will replace them?

“People who haven’t retired yet may be worried about the social isolation that can come with retirement,” says Johnston. “They may be concerned about losing social connections from work or not having a sense of purpose or meaning in their retirement.”

Finally, there’s the idea that you’re about to embark on a long trip with no itinerary. During your working years, you know exactly what you’re going to do. Retirement erases that daily agenda. Unless you have a well-planned retirement transition, the potential inability to live the retirement you desire can gnaw at you.

“People who haven’t retired yet may have specific ideas about the lifestyle they want to have in retirement,” says Johnston. “They may be worried about being able to afford the things they want to do, such as travel or hobbies, or whether they will be able to maintain their standard of living.”

What is the biggest mistake people make about retirement?

Johnston’s point suggests the best way to avoid the greatest error you can make heading into retirement. What is this big mistake, and how have happy retirees managed to avoid it?

“This one is simple: they haven’t had to modify their lives around that scenario, so the amount of change still seems extremely daunting,” says Brian Haney, CEO of The Haney Company in Silver Spring, Maryland. “It’s psychologically very hard to imagine ourselves ‘not working’ because, for the majority of our adult lives, that’s all we have been doing. We have an entire psychological framework, schedule, relational circles, and mentality established and built around work. Retirement isn’t just about ‘generating enough income’ to successfully sustain your lifestyle; it’s about building a new lifestyle (or significantly modifying the one you already have). Those that have retired have had to go through that transition, and regardless of how challenging or successful it was, they have faced it and moved beyond it so their lifestyle ‘fits.’ Until you actually do that, however, the thought of it might always seem bigger and scarier until you cross that threshold.”

Practice makes perfect, so if you want a “perfect” retirement, it’s best to start “practicing” retirement as early as possible.

“The transition from collecting a paycheck every two weeks to living on your savings can be extremely difficult,” says Brian Walsh, senior manager of Financial Planning at SoFi in Grand Rapids, Michigan. “Our experiences shape our expectations, so if your only experience is collecting a steady paycheck, anything different from that will seem abnormal and lead to fear. People who have already retired moved past that fear of the unknown, so it is completely natural that their new experience altered their expectations.”

Maybe it is possible to retire more than once. As you near retirement, try taking a vacation that allows you to test a potential retirement lifestyle. Better still, take a few of these vacations. This will ease the worry you might have about the prospect of retirement.

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