The Emotional Journey: Mentally Preparing for Retirement

I remember a story that a client told me about her retirement. She had been dreaming of the day she could retire and not have the pressures that being employed brings: commuting to work, the stress of dealing with co-workers and clients, and the pressure to meet the requirements of an employer.

What was interesting about her story was that she felt lost and confused about her role in life during her early retirement years when she was still as vigorous as she was in her working years. In her mind, she was the person who sat in the corner office and directed the activities of a large team of professionals. Once she retired, she felt like she lost her identity.

This is all too common, especially if you still have the desire to be productive and make a difference in your workplace and community. 

The good news is that retiring doesn’t have to mean losing your identity. It’s an opportunity to explore new roles you may not have had time to fill during your working years. 

It’s also a time when you should work with a Buffalo Grove retirement planner to ensure you have the right strategic financial plan to help you experience the type of retirement you’ve dreamt of and worked for over the past 30-40 years. 

In this blog, we’ll address some of the ways you can mentally prepare for your impending retirement and enhance your financial well-being. 

Ready to Retire Today? Preparing for Your Life’s Next Chapter

Anticipation and Excitement

Preparing for retirement can stir up a range of emotions, from anxiety to excitement. It’s a significant life transition and feeling a blend of these emotions is perfectly normal. After all, for most people, retirement is an age-based process. Some people age well, and others do not. Consequently, preparing for retirement can be as much about finding balance and joy in your new chapter as it is about having your finances in order. 

Take it one step at a time, and don’t hesitate to seek support from family, friends, and professionals.

Let’s break down how to approach this with both your mental and financial well-being in mind.

Emotional Preparation:

• Recognize that it’s normal to have a variety of emotions about retirement. Talk to current retirees in your circle and discuss how they handled the transition.
• Imagine what a typical day in your retirement will look like. What are you doing in the mornings, afternoons, and evenings? Who are you with? This can turn abstract anxiety or excitement into tangible plans.
• Engage in hobbies, volunteer work, or part-time jobs. Keeping busy can ease the transition by providing structure and social interaction. Plus, staying active has proven to lead to a healthier, happier, and longer retirement.

Financial Preparation:

• Review your retirement accounts to ensure you have adequate sources of income. It’s a good time to max your contributions to tax-advantaged retirement plans if you are behind the curve in the years before your retirement date.
• Plan to enter retirement with as little debt as possible. Focus on paying down high-interest debts first.
• Create a realistic budget that reflects your retirement lifestyle. Consider expenses that might increase, such as healthcare and those that might decrease, such as employment-related costs.
• A Buffalo Grove financial planning professional can offer personalized advice tailored to your financial situation and retirement goals. Our team of professionals can help you develop investment strategies focused on a comfortable, secure lifestyle during your retirement years.

Watch our co-founder, Steve Lewit, on WGN 9 News.

Identity Shift and Finding a New Purpose

You have always measured your value based on a job well done. Now, you need a new metric. Retirement is an opportunity to expand your horizons and discover new ways to bring joy and fulfillment to your life. Embrace this chapter with a positive, open mind, and you’ll realize that the possibilities for finding purpose are as rich and varied as life.

• Lending your time and skills to causes you care about can be incredibly fulfilling. Whether it’s helping at a local charity, mentoring young people, or supporting community projects, volunteering allows you to make a tangible difference while connecting with others.
• Have you always wanted to learn how to speak Italian? Retirement is the perfect time to pursue learning for the sake of learning. Many community colleges and universities offer courses for seniors at reduced fees or even free. Whether it’s history, art, technology, or a new language, immersing yourself in new subjects can be both stimulating and rewarding.
• Have you always wanted to paint, write, play an instrument, or engage in pottery? Now’s the time to unleash your creative side. Creativity isn’t just about producing art; it’s a way to express yourself, process your experiences, and see the world in new ways.
• Physical activity is good for your health and can also be a source of purpose. Whether you decide to join a hiking group, learn to play golf, take up yoga, or learn to dance, staying active can boost your mood and connect you with others who share your interests.
• There’s something deeply satisfying about tending to a garden. It’s a peaceful activity that connects you with nature and the cycles of life, and there’s the bonus of beautiful flowers or homegrown vegetables.
• Retirement is a wonderful time to explore places you’ve always dreamed of visiting. Whether it’s local day trips, national park tours, or international adventures, travel can expand your horizons and introduce you to new cultures and experiences.
• Retirement can be a great opportunity to strengthen bonds with family and friends or to make new connections. Consider joining clubs or groups that align with your interests, where you can meet people who share your enthusiasm.
• Sharing your knowledge and experience can be incredibly rewarding. Consider consulting, part-time work in your expertise, or even starting a small business that aligns with your passions.

Listen to our latest podcast: Retirement Wellness: Financial Checkup and Tips

Financially Preparing for Retirement

Preparing for retirement can be stressful, but it’s about making the right decisions and taking the right steps at the right time. Planning, patience, and persistence are your best friends on this retirement journey that may last 30 or more years.

Here’s how you can get ready for your retirement years:

• The sooner you begin retirement planning, the more time your money has to work for you. The magic of compound interest working overtime will work in your favor.
• Evaluate your current budget and update it for the impact of retirement. There will be several differences and potential compromises. Budgets are about balancing spending, saving, living within your means, and still enjoying life on a day-to-day basis.
• Whether it’s a 401(k), an IRA, or a personal savings account, the key is to keep adding to it – even during your early to mid-retirement years. Think of it as paying your future self.
• Don’t put all your eggs in one basket. A diversified mix of stocks, bonds, and other investments can help your savings grow for reasonable risk.
• Health expenses can be a significant part of retirement costs. Look into health savings accounts (HSAs) and long-term care insurance.
• Understanding when and how to claim your Social Security benefits can significantly impact your retirement income.

These financial disciplines do not mean you can’t enjoy life; they guide you in making informed choices that align with your long-term retirement goals.

Sometimes, a little guidance goes a long way. Consider meeting with the team of highly experienced Buffalo Grove retirement planners at SGL Financial.