Key Takeaways
- Retirees may experience a loss of identity, loss of social connection and other mental health issues.
- Practice “retirement” before actually taking the plunge.
- Communicate with your spouse about what retirement should, and shouldn’t, look like.
You may have created a retirement investment plan that factors in future contributions to your portfolio, return expectations, the number of years until you plan to retire, estimated longevity in retirement and even simulations that analyze the probability of achieving various financial outcomes.
But have you also taken a good, hard look at the social and emotional aspects of retirement— and how those “soft issues” could have a big impact on your quality of life during your golden years?
We believe a wealth management plan for retirement needs to look beyond just the numbers and facts. For one, retirement isn’t simply about spending the money you’ve accumulated over time—it’s about living a life of significance and continuing to make a difference.
What’s more, the social and emotional challenges that many retirees find themselves facing can lead to events that may directly impact their financial health and flexibility. An unexpected “gray divorce,” for example, can throw a wealth plan off track quickly.
With that in mind, consider some important nonfinancial concerns that you might experience in retirement—and ways to avoid them or deal with them if they come your way.
The problem with retirement
Unfortunately, the stereotypical image ofan idyllicretirement doesn’t always match the reality of being an actual retiree. That’s likely always been the case, but it is becoming increasingly common. One possible reason: We’re living longer (in some cases, much longer) than past generations—which, in turn, allows more time for issues such as anxiety, depression and cognitive decline to rear their ugly heads.
Then again, it might not take much time for retirement-related stress to have an impact. Retirees are 40% more likely than those working to have a stroke or heart attack, according to research by the Harvard School of Public Health—and that risk was most prevalent during the first year of retirement.
Some other concerning findings from studies:
- According to a meta-analysis of 11 different studies published in the journal Healthcare, 28% of retirees exhibit signs of depression.
- On a well-known list of 43 life stressors—The Holmes-Rahe Stress Inventory—retirement ranks tenth.
However, other studies have shown retirement to reduce stress, so it’s hardly a given that you’ll experience negative social and emotional outcomes in retirement. But the evidence strongly suggests that you should have your mind on more than just your money as you plan to call it a day.
Social and emotional retirement challenges you might face
Consider some social and emotional challenges we’re seeing among more retirees these days:
#1: Loss of identity
Leaving the workforce can erode people’s sense of purpose and self-worth. Regular roles and duties are well-defined when we’re working, in ways that can be tough to replicate outside of that environment.
This may be especially true for C-level executives, entrepreneurs and other professionals in roles that involve a great deal of leadership, control and respect from other people. Likewise, workers who retire involuntarily or before they’d hoped to may be at greater risk for feeling directionless and unsure of what their post-work identity should be.
#2: Loss of social contacts
Not all retirees have “the gang” to meet up with for coffee every morning. Indeed, growing social isolation among Americans has become the most prevalent health issue in the country today, according to former U.S. Surgeon General Dr. Vivek Murthy. Consider that more than 25% of Americans live alone and that fewer people are volunteering in their communities than at any time in the past two decades.
One outcome of increased levels of loneliness: Between 2001 and 2021, suicide rates significantly increased for men aged 55–74 and women aged 55–84, according to the Centers for Disease Control and Prevention.
#3: Retirement dreams that don’t pan out
That long list of planned retirement activities and adventures looks great on paper. But what happens if many of them aren’t all you hoped they’d be? Dreams that make you say “woo hoo!” today can turn into experiences that leave you feeling “meh” afterward—leading to frustration that can cause you to question who you’re supposed to be in retirement (see #1).
#4: Fears of overspending/asset losses
Even if you have great confidence in your retirement wealth plan and can see that all the numbers look good, that confidence can be shaken once you’re no longer earning a big salary and are fully reliant on that plan. Retirees—even affluent ones with plenty of wealth— often are reluctant to spend the wealth they’ve built and have trouble creating a life of significance for themselves. When they do splurge, they may feel anxious instead of elated.
This can be especially prevalent among the most responsible investors—the ones who were extremely diligent about saving money throughout their careers. Such anxiety can really ramp up during periods when financial asset prices fall and negative emotions rise.
#5: Separation or divorce
While the divorce rate is falling among younger Americans, the rate among those aged 50 and older has doubled since the 1990s—and has more than doubled for those over age 65. Since half of the married population is aged 50 and over, it’s projected that, as the U.S. population ages, by 2030, the number of persons aged 50 and older who divorce will grow by one-third.
Retirement can lead to such outcomes because it may mean one spouse who was at work for hours nearly every day is now constantly at home—giving rise to resentments from the other spouse who feels their daily pattern is being thrown off. Or it may be the case that the new retiree starts treating their spouse more like an employee or underling than a partner.
Obviously, a retirement that suddenly turns solo can impact one’s physical, mental and financial health.
Action steps to consider
The good news is that there is plenty you can do that may help you prepare for your eventual retirement in ways that might allow you to sidestep many of the social and emotional hurdles outlined above (as well as others)—and, in doing so, potentially safeguard more of your wealth.
Consider action steps such as these:
Practice the retirement you envision while you’re still working
Test out your retirement plans on a smaller scale before you leave the workforce to see how well they actually work and how they really make you feel. This can allow you to go into retirement with a feeling of conviction that your plans are a good fit instead of treating retirement as a giant life experiment of “seeing what sticks.” Leave room for new experiences and spontaneity, of course—but put your major to-do list items through their paces.
Seek out new social outlets, especially daytime ones
How will you spend your time during what has been your prime working hours each day? And, importantly, how will you maintain connections with people? If you have a group of already- retired friends, you might be all set. If not, seek out meaningful ways to spend your days that are fun, rewarding and social and that help you keep your mental edge.
Some of the many possibilities include volunteering at schools, teaching adult education (particularly if you have a defined skill set that people want to learn), taking classes in new areas of interest or joining pickup sports leagues. There’s nothing wrong with spending part of your time pursuing home projects and solo goals, but try to keep your social avenues strong, too, to stave off late-in-life loneliness.
Talk to your spouse about expectations and wants
Your spouse might want to join you on all your new retirement adventures, assuming they are able to do so. Or they might prefer a quiet space away from you or even want you out of the house during certain hours in order to maintain their long-held routines.
Regardless, the key is to communicate honestly and openly with each other about needs and expectations going into this new aspect of life in order to head off resentments that could create a rift in your relationship. And keep in mind this isn’t likely a “one-and-done” conversation. You’ll want to check in with each other on occasion to see how the existing plan is working for each of you.
Consult with your advisor
Top advisors care deeply about helping their clients live lives of significance and using their wealth to make an impact. Chances are, your advisor has insights and ideas for addressing not just the financial side of retirement but also the social and emotional aspects. Some may even be able to introduce you to life coaches, retiree groups and other valuable resources.
Express gratitude each day
At the end of each day, write down three things that happened during the past 24 hours for which you’re grateful. They can be big events or tiny life moments. Either way, expressing gratitude can actually rewire the brain so it spends more time scanning the world for positive moments.
Get help if you need it
Above all, don’t ignore social or emotional challenges that may occur during retirement. If you’re feeling socially disconnected, depressed or anxious, get help or ask someone you trust to find you a professional who can help you.
Conclusion
You’ve probably worked hard and invested diligently to build wealth toward your retirement. Don’t let that work go to waste by suffering social and emotional challenges that lead to lots of negativity and bad outcomes. Taking a holistic view of your golden years can be a great way to get on a path that enables you to enjoy your retirement years fully.
VFO Inner Circle Special Report
By John J. Bowen Jr.
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