How to Mentally Prepare for Retirement Anxiety – Birchwood FP

Some things about retirement can't be measured with numbers. The first year of retirement can seem like one of the most stressful of your life, and that stress is about more than the money you have or haven't saved.

"The transition from working to retirement can cause anxiety," says Bridget Handke, CFP® CAP®, Financial Advisor and Principal at Birchwood. Bridget has worked with many retirees who naturally find themselves disoriented when their working years come to an end, and she describes the mental and emotional impact of retirement as 'the flipping of a switch.'

What Changes When You Retire?

With financial planning help, retirees can manage their budget to minimize the financial confusion of retirement (like budgeting to control what Bridget says can feel like "an amorphous pile of money"). The mental and emotional effects of retirement are just as important, but they're sometimes sidelined.

Keep in mind that it can take more than financial security to prepare for retirement. Consider these elements of your life that will likely change when you retire:

• Your Personal Identity: "We sometimes get our identity from our work," Bridget says. During our working years, our occupation naturally becomes a part of us. But when work is no longer a large part of your life, it can leave a gap between your self-perception and your new lifestyle. Some people "ask themselves questions they never thought of before," Bridget says. "'What is my identity?' 'Who am I when I'm not working?' The challenge is that most people don't understand these questions are going to hit them."

• A Reason to Get Up in the Morning: When so many mornings start with the same goal – get ready for work – the mornings that don't can feel unanchored. A successful transition to retirement may need a structure, a schedule, and boundaries.

• Social Interaction: For many of us, work fills not only our professional aspirations but our social needs, as well. We become used to seeing familiar faces – so much so that it can shrink our capacity for social interaction outside of work. How often have you come home from work and not felt up to going out or meeting the neighbors? Without a strong social network outside of work, retirement can pull the rug out from under your social relationships.

• A Sense of Meaning: In capitalist society, work gives us purpose. We have a consistent, repeatable goal and metrics by which to measure it. Sometimes, we can even see the impact of our efforts. In the absence of that daily outlet, many retirees find deeper meaning in nonprofit work, volunteerism, family, and even part-time work. Before retiring, find what else gives you a sense of meaning and find out how you can pursue it after you stop working.

One Thing You Can Do Today to Mentally Prepare for Retirement

All of the above factors are existential components of your retirement. Many retirement anxieties can be addressed with smart financial planning, but for the intangible effects of retirement, Bridget recommends imagining your life post-work.

"Envision your first week of retirement," she says. "What are you going to do when you wake up Monday morning? How are you going to fill that day? Then repeat it for the whole week."

Consider not just the non-work things you do now, like spending time with friends or visiting the gym, but also the things to which you'll be able to commit your skills and free time, like volunteer work or a new hobby. The simple exercise of realistically planning out the first weeks of retired life can make the switch-flipping less of an emotional jolt.

Wait for a Good Reason to Retire

If you're financially prepared for retirement and still anxious, there's a chance it might just not be the right time to retire. As you approach retirement age, Bridget says you should continue planning, but be honest about why you're retiring.

"We can tell people are nervous about actually retiring when they check the numbers very often," Bridget says. "I had a client come in multiple times in one year to assess their retirement planning. Nothing about their plan changed significantly that year, but they kept requesting meetings.

"That client retired shortly thereafter," Bridget adds, "but returned to work after one year. It turned out they just needed a sabbatical, but they didn't realize it until after they'd retired."

With the right financial planning help, you can start to lock down the numbers and prepare for the mental and emotional impact of retirement.