Although most people look forward to retirement as a time to relax and enjoy their family, friends, and favorite hobbies, not all of them realize that it requires a significant lifestyle adjustment. Even if it’s a welcome change, smoothly transitioning from a work-oriented lifestyle to that of a retiree may be challenging for those who aren’t prepared for it.
Here are five challenges that you’ll likely face as you ease into your retirement years.
1. Using Your Savings Responsibly
As a retiree, you no longer receive a regular paycheck from work, and there aren’t any bonuses, raises, or promotions to cushion unexpected expenses or unplanned extravagances. Living on a fixed income from a 401(k) account or a pension and your savings may take some getting used to. You may need to adjust your spending habits and review your household budget and spending on a monthly basis to ensure your savings will support your retirement lifestyle for your remaining years.
If in the past, you’ve depended on credit cards and loans to finance trips, home renovations, or vehicle purchases, it may seem tough to change your spending attitude and behavior at this stage in your life. However, using your savings responsibly could mean the difference between a financially successful retirement and running out of money in your golden years.
Keep these points in mind when thinking about managing money in retirement.
Estimate your retirement years with a longevity calculator to figure out how long your savings may need to last. Keep in mind that people are living longer than ever before. A 65-year-old man should expect to live to 84, whereas a 65-year-old woman should expect to reach 86, according to the Social Security Administration.
Create a new retirement budget. Some of your work-related expenses, such as a work wardrobe or transportation costs, may disappear—or at least shrink. Others, such as travel expenses or money spent on hobbies (e.g., golf), may increase in the early years of your retirement, then taper off as you age and your interests change.
Schedule regular reviews of your investments to ensure that they’re still meeting the investment return goals needed to fund your retirement. For many years, financial advisors used the “4 Percent Rule” when helping clients decide on how much to withdraw, but increasing longevity figures and low interest rates mean that this may no longer be your best option.
Think twice before dipping into your retirement savings as an emotional response to a situation facing you or a loved one. Doing so could devastate your finances at a time when your options to generate more income are limited.
2. Keeping Mentally and Physically Active
Yet another challenge in adjusting to retirement involves finding ways to keep mentally and physically active. Although your pre-retirement life may have offered ample opportunities to stretch your mental muscles, in retirement, you’ll need to be a little more purposeful in finding ways to challenge your brain.
Some activities to try include:
- taking music lessons
- learning a second language
- playing online brain games
- doing crosswords or Sudoku
- taking up bridge or another group card game (this lets you socialize at the same time)
Staying physically active may also be difficult for new retirees, but it’s very important that they do. Recent studies indicate that staying physically fit impacts more than just your muscles—it helps stave off mental decline as well.
To meet the challenge of staying physically fit in retirement, choose an activity you enjoy. It’s a lot easier to stick with something that’s fun to do than something that feels like a chore. And don’t think you have to take up body-building or train for a marathon. There are many moderate forms of exercise that you can try out, such as gardening, golfing, tennis, walking, yoga, or Tai Chi.
3. Finding Ways to Socialize
Once you retire from your job, you may find yourself missing the social interaction your co-workers and customers provided—yes, even those who drove you nuts during your working years. That’s why it’s important to make a concerted effort to connect with others.
Isolation in retirement is a growing epidemic affecting over 8 million older adults across the country. In addition to the emotional symptoms isolation brings on, such as sadness, loneliness, or depression, one study found that prolonged isolation resulted in an increased risk of early death. Avoiding isolation is particularly important if you aren’t married or don’t have a partner. According to the Bureau of Labor Statistics, single people age 65 and over spend an average of 10.1 waking hours alone each day.
The best way to avoid isolation is to take charge of your social calendar. Look for opportunities to socialize as part of your daily or weekly routine. Local options could include taking part in programs offered at your library, senior center, church, or the Y. Start or join a book club, cooking club, or music appreciation night, or pursue a favorite hobby, sport, or volunteer activity. And don’t limit yourself to social opportunities with other seniors. Spending time with people of all ages can be very enriching.
4. Finding Ways to Continue Contributing to Society
Some retirees might feel that working gave their life purpose and they have little to contribute to society in this new chapter in life. That simply isn’t true. Today’s retirees have many options to become involved, stay engaged, and help in their local community and beyond. Start with these ideas to find something that suits your experience and interests.
Volunteer for a favorite cause. Canvass your neighborhood, fundraise for a special cause, or volunteer your time at a faith-based group, community-based organization, or local chapter of a national agency.
Share your knowledge. Although sharing what you’ve learned over the years could take the form of teaching or tutoring, there’s also the option to write a book about what you’ve learned (in the workplace or in life), or even act as a consultant or mentor to younger members of your profession.
Help your family and neighbors. These days, many new retirees care for an elderly parent or assist with grandchildren. Whether you’re driving your mom to a doctor’s appointment or your granddaughter and her friends to school, helping out is a great way to contribute to the people closest to you.
5. Spending Free Time Wisely
Confronted with the freedom of retirement, it may be difficult to decide how to spend your time. You’ve worked for a long time, and although you’ve probably earned the right to laze about, you might not want to. Consider what brings you joy, and what you wanted to do but didn’t have time for when you were working. Prioritize these activities when determining how to spend your free time.
But do try to avoid jam-packing your day’s agenda. Remember, there’s no need to gulp down breakfast and rush out the door to work. Instead, sleep in, linger over your morning coffee and paper, or laugh over a long lunch with a friend. Savor the taste of a newly-tried recipe, pursue that hobby you never had time for. Connect with old friends and make new ones. Arrange visits or trips to far-flung family members to stay connected. Figure out what makes you happy and do it!
No matter your eagerness, adjusting to life in retirement takes some time. Confront the bumps in the road as they appear, and start thinking about ways to make the transition to life as a retiree a little smoother.