Unexpected Challenges of Retirement

You’ve made it. Years of implementing your personal financial plan  and preparing for your retirement has finally paid off. You’ve retired according to plan, and maybe even a little early. The hard part is over, right?

Well, yes, for now. The whole truth is, that while the lean years leading to your retirement are behind you, every stage of life has its unique challenges. Some will be financial challenges, but not all, and we need to be prepared for everything.

What challenges might you expect to face early-on, and perhaps throughout your retirement?

Financial Discipline Needs to Continue
I’m sure I sound like a broken record, but careful, disciplined spending is the backbone of a healthy financial life. You’ve sacrificed and sacrificed, and now that you’ve reached retirement it’s time to take some deep breaths and cut loose – well, not so fast. You should reward yourself, but you need to get right back on track and have a detailed spending plan in place for your retirement years. You might even need to scale back. You may not have quite the same income available in retirement that you did while working – that means your ability to take corrective action is limited. If you do, that is great, but better to make sure so you don’t run into problems down the road. 

Lifestyle Inflation
This is something we all battle throughout our lives. We get promotions and raises and behave accordingly instead of regulating our habits and maximizing savings with our new income. It could keep us spinning our wheels, unable to get ahead, and it’s the kind of problem that wreaks its havoc before we even realize what’s happened. In retirement, this potential threat is no different. The hours you spent working and earning your living are now freely yours – and those hours are too often spent spending. If you’ve planned well, you might  have a retirement plan that closely matches the living costs of your working years, but with more time for travel, nights out, outings with the grandkids, and other pursuits.  However, if you are not careful, that income can evaporate more quickly than we ever anticipated.

Figuring Out Your Second Act
While we’re working, our careers can provide  a part of our identity and personality. When that’s gone, we need to do some soul searching and determine what’s next. This is called our “Second Act” and it’s just as important to a happy and successful retirement as the years spent getting there in our first act. Ask yourself searching questions that get to the core of what motivates you, what have been your lifelong aspirations since you were a child, what ways of spending your time makes you the happiest? Seek help from friends who may be a year or two ahead of you on the retirement curve. Their advice and counsel might save you months of stress and angst. It is important to stay active in meaningful pursuits during retirement.

Social Isolation
Social Isolation can be  a serious problem among retirees. Work added a heightened emphasis to our social obligations. We prioritized socializing because it provided balance to our lives and was a welcome break from our work routine. Now, in essence, all of your time could be spent socializing, and it’s easy to take that for granted. If we are not careful, eventually, after promising ourselves that we’ll make it to next week’s book club or round of golf, we stop going altogether, and the network of friends we thought we had deteriorates. The problem can be self-perpetuating. We become isolated, stop feeling like ourselves, and lose even more motivation to socialize, which then deepens the isolation. In retirement, we need to prioritize our social lives.  We need to have activities that we look forward to and get us excited about getting out of bed in the morning.

Confronting Your Psychological Preparedness
So much time was spent ramping up to this moment and much of the focus was on your finances. I will be the first to tell any of my clients that financial peace of mind is an important pillar of happiness. Yet, as you enter retirement, there are some things that no budget can account for. One of those things is an honest assessment of whether or not you are mentally and emotionally prepared for retirement.  Retirement will potentially be a big  transition, and with it, a difficult adjustment period. If you were a “workaholic” and really loved your career or the company you served, this might be an even more exaggerated obstacle. Instead of running from one activity to the next trying to keep busy, slow down and let retirement come to you, remain open to what life can be like when you’re given back the time you’ve not had to yourself in 30+ years. Retirement is another phase in your life. Take time to savor and enjoy it.

These are possible trials you may face once you  reach retirement, but what if your finances aren’t ready? Trying to get on track and save for your retirement can be an even more daunting challenge. Take my assessment to help clarify where you are and what needs done to set you up for peace of mind in retirement. Whatever your situation, it’s never too late to start saving, preparing, and planning for your future. Taking my free self- assessment can help.

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United Capital Financial Advisers, LLC (“United Capital”) provides financial life management and makes recommendations based on the specific needs and circumstances of each client.  For clients with managed accounts, United Capital has discretionary authority over investment decisions.  Investing involves risk and clients should carefully consider their own investment objectives and never rely on any single chart, graph or marketing piece to make decisions.  The information contained in this blog post is intended for information only, is not a recommendation to buy or sell any securities, and should not be considered investment advice.  Please contact your financial adviser with questions about your specific needs and circumstances.