3 Tips to Help You Mentally Prepare for Retirement
Melissa A. Seamon, CFP®
Senior Financial Advisor
When you think about preparing for retirement, your investments and overall financial health are likely the biggest things on your mind. But you would be remiss to not start mentally preparing yourself for retirement as much as you’ve been prepping your financial accounts.
As you come to the end of your working years, you may be dreaming of complete relaxation and sipping one of those cliche umbrella drinks on a beach when you retire. That is the desired outcome after all — to enjoy life completely unattached from work and (most) responsibilities after having done that your entire adult life.
But what exactly will your retirement look like for you?
Will you get bored?
Will you be able to do everything you want?
What you basically need to know is: How can you ensure you are ready for retirement from a living perspective?
Well, no one has a crystal ball. And we all change our minds from time to time, but there is a lot to be said for giving the following list some forethought before you make the big transition.
1. Think About Your Schedule
When you retire, your mind and body will have been used to a routine since about age 5 or 6 when you started kindergarten. Straying from that can be a huge shock to your system.
For some generations, mental health can be a taboo subject, but you will want to think about yours heading into retirement. Even before the COVID-19 pandemic caused depression and anxiety to skyrocket in adults of all ages, one in 10 (11%) older adults — those age 65 and older — reported depression or anxiety on the 2018 Medicare Current Beneficiary Survey.
One way to help the transition and your mental health is to keep to a schedule. No, you don’t have to get up at an exact time each day and get to a specific place at a certain time, but taking cues from teenagers and sleeping all day, staying up all night, and not eating regular meals could take a toll on your mental and physical health. And so could not having any place to be, especially if you have been a business owner and used to putting in 50 hours or more per week.
Consider what you would like to fill your schedule with. Staying physically active can also help your mind, body, and soul. Starting a side hustle might help scratch your entrepreneurship itch. Taking an art class or cooking class might quench your creative thirst. Do you want to start a book club? Volunteer in the community? Join a golf league? Get to all of those DIY projects on your list?
Whatever you decide, having a few things each week to look forward to (penned down on the calendar) can keep you active and help ease your transition to the retirement life.
2. Determine Your Priorities
A lot of people had big retirement plans when the pandemic hit. Some put off retirement, some had to put off big trips they had waited decades to take, and some had to go without seeing friends and family for a long time. Some grandparents hadn’t even met new grandchildren until they were already three or four years old!
You never know what is in store for you (or the world at large) during your retirement period. And it’s impossible to predict if your health will keep up. So, start thinking about what your main priorities are now.
If you want to spend more time with and be closer to family, then you will want to consider those logistics. Will you simply travel a certain number of times per year to see everyone? Are you going to take the whole crew on a family vacation each year? Should you consider moving or purchasing a second home to be nearby?
If you have a huge bucket list of travel destinations around the world, you will want to start thinking about putting those trips in a specific order. Consider the physical demands of reaching and enjoying each destination and put the harder ones toward the beginning of your retirement when you (hopefully) still have some extra spring in your step.
Even if your biggest priority keeps you closer to home where you can spend as much time on your boat as possible or make a quilt for every member of your family, think about what you need to do now in order to make that happen. Life can change in a split second, and you want to make the most of what you’ve got while you’ve got it.
3. Transition from Saving Mode
You’ve been working and saving for so long, it’s going to feel weird not having any fresh (non-personally generated) income coming in. Sure, your investments will keep making money, but you will be done with the traditional paycheck. And let’s just be frank, transitioning from saving to spending mode is hard for many retirees.
Research from BlackRock and the Employee Benefit Research Institute shows that even after 17-18 years of retirement, retirees across all levels of wealth still had 80% of their pre-retirement savings. And that was even more likely for high-net worth individuals, who have assets worth more than $1 million.
You need to prepare yourself for seeing balances go down without losing your cool. That’s why you worked your tail off all those years, saved, and invested. Now it’s time to use that money for its intended purposes.
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