29th February 2024
general
Most people look forward to retirement and the extra free time this will bring. Perhaps you will travel more, spend time with family, or take up new hobbies.
However, the closer it gets, it can also bring up questions, doubts, and fears, which can take some of the joy out of planning.
Retiring isn’t simply a practical decision - it stirs up all kinds of feelings which can influence our choices. It can be especially difficult for people whose identity is interlinked with their careers or anyone who is naturally anxious when it comes to major life changes.
In this article, we’ll be addressing some common retirement fears head-on and suggesting some strategies to overcome them. It’s completely natural to have questions and negative thoughts about retirement, but it’s also possible to address them and to step confidently into this exciting next stage of your life.
Retirement fear #1: Running out of money
When you are used to receiving a regular income from a salary, the thought of no longer having this money coming in can be quite daunting.
When you retire, you will be reliant on the assets you have built up over your lifetime and the income this can generate. If you have a defined benefit pension scheme from 40 years of employment, you may be better placed than some to meet your regular expenses in retirement. However, most retirees will be reliant on defined contribution pensions, savings, and investments. Rental properties and business assets could also form part of your plan.
Being reliant on your capital can introduce risks that you haven’t thought of before. What if the market drops and your pension loses value? What if the cost of living rises or you are faced with an unexpected bill? What if the income from your investments goes down? What if you don’t have enough money to last the rest of your life?
One of the best ways to face this fear is to have a solid financial plan. Planning ahead of time not only brings you closer to your goals, but also helps to address any potential risks that could endanger your financial security.
Your plan should account for “worst-case” scenarios which you may be imagining. If not, then it might be time to speak with a financial planner to make sure you are covering all of your financial bases and putting your mind at rest. You may even find that some of your worries are unfounded or can be easily dealt with.
Retirement fear #2: Losing identity
As many people spend the majority of their waking hours at work, it can become an important part of their identity. In some parts of society being successful or good at your job provides more social currency than being a good parent, friend, or neighbour.
When we retire, this part of our identity is gone. Having spent years building up your career, to suddenly be without it can feel like a loss. Some form of grieving process is entirely natural.
One of the best ways to face this fear is to plan ahead of time and mentally prepare yourself for the change. Perhaps this means retiring gradually rather than all at once. It’s also a good idea to think about how you will spend your time when you retire, and whether you feel your workplace identity could have a part to play. For example, by joining social groups or becoming involved in charities which are linked with your former profession.
Or perhaps you are ready for an entirely new adventure. You may be happy to break ties with your career altogether and embrace an entirely new identity, whether this is as a grandparent, hobbyist, or volunteer.
Retirement is a new chapter in your life, and you will likely feel much better about it if you prepare yourself. Filling your time with new purposes which resonate with your passions and values can help to spark some of the excitement again.
Retirement fear #3: Declining health
Getting older does, unfortunately, have some negative aspects.
Perhaps you don’t have the same energy you had when you were younger and certain tasks might not come as easily. Many people carry on working beyond their capacity, only to suffer a health crisis when they finally have a chance to rest.
You may be concerned that your health won’t allow you to fulfill your retirement goals. It’s also possible that friends and family members of a similar age have developed serious health problems, and you may be worried about facing your own mortality.
Whilst none of us can shield ourselves completely from old age or health problems, there is much we can do ahead of time to improve our wellbeing. We can also make important plans and financial arrangements, to make sure we are looked after, and our families are provided for.
There is no shortage of advice about taking care of your health, so we won’t cover that here. However, we will say that working with an experienced financial planner can help you to put some plans in place so that if the worst does happen, you have some financial protection for you and your loved ones.
Remember, you are in control of your retirement. If you want to retire early and never look back, you will need to plan ahead and make sure this is affordable. If your job is your identity and you find it difficult to let go, you can find ways of easing the transition. Taking care of your health and aiming to enjoy life as much as possible should give you the best chance of a stress-free retirement.
