Retirement is often looked at as a pinnacle in someone’s life as they finally have the opportunity to prioritize themselves. Yet, for many, this new chapter of life can be disheartening as they say goodbye to a previous way of life. In order to avoid a wandering perspective and to make the most of retirement, here are 5 tips for transitioning into retirement.
Before you retire, you need to begin the conversation of what you want to do in retirement with your people. The average retirement age in the United States is 62, while the expected retirement age for current workers is 64. It is never too early to start having the conversation and ask yourself, “What are the activities and experiences you “never had time for”?” From this question you can start to outline what your top priorities are in retirement. The best thing you can do, is have this conversation with your close family and friends. This will help them be able to support you in your future endeavors. If you have a spouse, it is wise to start this conversation as soon as retirement is on the horizon, so that you can both be on the same page and prepare for what life may look like with one or both of you retired.
Finances change drastically in retirement, it’s time to welcome the adjustment from saving to spending. It can be difficult to see the very portfolio you have devoted years to accumulating wealth in start to decrease. The important thing to remember is that retirement was the purpose for your saving. One of the top things you can do to prepare for this shift from saving additional wealth to living on a fixed income is to have debt paid off. By having debts paid off you feel more confident in your fixed income. If you are worried about your expenses, in 2020, the average annual spending by Americans ages 65 and older was $47,579. Within that, of retired U.S. adults, 57 percent rely on Social Security income.
Retirement is often thought of as the time that you no longer work. Yet, over 55% of workers plan to work during retirement. For some, retirement means no working at all whereas for others it means doing what you love on your own time. British National Citizens Service states that retirees grow bored within one year. Therefore, part-time work or volunteer work can help with the “boredom” or to help structure your life in a purposeful way. Ask yourself, what organizations or businesses in your town do you want to be more involved in? Pursue that.
On the flip-side of the above, it can be a foreign concept to some that you can rest without the stress of work weighing down on you. Having downtime does not mean you are not making the best of your retirement; it means you are allowing your body its necessary rest. It is an art to learn to slow down in a world that is constantly screaming to do more, be more, etc. When you are looking into volunteer work, family time, or a part-time job; make sure to not overcrowd your schedule. With a full calendar, you deplete your own reserve of energy for yourself.
Invest time into your friends and family just like you invest money into your bank account. By investing into these relationships you will have compounding benefits over time. Friends are a health benefit too. A 2018 study in the Journals of Gerontology found that loneliness was associated with a 40% increase in dementia among study participants. Friendships help lessen the feelings of depression and provide emotional support. Over 7 million people over the age of 65 are depressed according to the CDC. By surrounding yourself with strong community through, church, family, organizations, etc; you are allowing yourself to be the best version of you. Remember: you are never too old to build new friendships.
As you enter retirement, the places that used to define you are soon in the rearview mirror. This can be difficult adjustment as the doors you walked through at 8am everyday for work are replaced by a morning coffee at 8am. Your job often can become a part of you that you cling to and it always will be. However, in retirement it is no longer your main activity in the day. In this, you must be prepared to re-identify yourself in light of retirement. To not get caught up in the sadness of what was, instead it is important to learn before retirement what you are gaining. For some it is time with family, you can start by reminding yourself that you get to enjoy watching your children and grandchildren grow up. For others it is leaning into being a voice in your community through a non-profit or other organization. It is important to find somewhere that you can put your energy in retirement, by starting this conversation with yourself earlier it will make transitioning into retirement smoother.
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Financial Planning Associate