The Emotionally Unprepared Retiree

Comprehensive retirement preparation goes far deeper than simply being financially ready, including a number of emotional and psychological challenges for which retirees may be entirely unprepared.

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    The Emotionally Unprepared Retiree

    The Emotionally Unprepared Retiree

    The financial services industry’s perspective of retirement tends to be a narrow one, viewing it as largely a financial experience. We calculate how much individuals need to fund retirement, determine the required annual savings and implement an appropriate investment plan. Done properly, we deem our clients fully prepared for retirement.

    Comprehensive retirement preparation, however, goes far deeper than simply being financially ready. Retirement introduces a number of emotional and psychological challenges for which retirees may be entirely unprepared, the consequences of which may result in an unhappy retirement, no matter how solid their retirement finances may be.

    There is Loss in Retirement

    Retirement is marked by profound losses for individuals. It’s not just the loss of a paycheck, but it’s a loss of a way of life. For many Americans, work defines a large part of their self-image, represents the heart of their social network and is the central organizing activity around their waking hours. Retirement takes that all away.

    It should then come as no surprise that the emotional adjustments to retirement are big, and may prove overwhelming without proper advanced planning. According to research by the University of California—San Francisco1, there are six distinct transitional phases of retirement:

    1. Pre-retirement—Too often the focus is on getting to retirement rather than preparing for what will happen in retirement.
    2. The Big Day—This is a single day event when work ends. It should be marked with ceremony.
    3. Honeymoon Phase—This phase is the “sugar rush” of enjoying the freedom to do all those things that working didn’t always permit.
    4. Disenchantment—With the novelty wearing off, feelings of disillusionment, boredom and anxiety develop.
    5. Reorientation—This phase involves self-examination and redefinition to form a new identity. It may be the most difficult phase of all.
    6. New Routine—New patterns and habits form around a new lifestyle. It is a phase accompanied by fading negative emotions.

    Shepherding a Successful Transition

    A successful retirement transition starts long before the retirement date. To facilitate this planning, investment professionals can expand their retirement planning discussions beyond the financial to encourage clients to proactively design their golden years before they retire.

    Engage your clients in conversations about what an emotionally and spiritually happy retirement looks like to them. Discuss how it will mean finding new purpose, creating a new set of social connections and discovering new interests. Encourage them to reflect on their personal skill set, interests and goals for retirement to create a foundation for designing a plan for their next chapter.

    With your help, your clients may skip the “disenchantment” phase altogether!



    See referenced disclosure (2) at 




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