How to Transition to Retirement

Retirement Planning | Life Events

 Derek Jess By: Derek Jess

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We all find some degree of our purpose and identity in the work we do. As we contemplate a potentially near-term transition into retirement, it’s natural to understand the importance of being sure you’re financially ready. However, it is equally important to ensure that you are emotionally and psychologically ready as well. We’re leaving behind our life’s work, social connections, and perhaps a more active and engaged lifestyle. Because of this, it is vitally important to make not just retire from something, but also retire to something.

This new “something” needs to give us the same, or even greater, degree of purpose, community, belonging, and engagement to fill the void from what we’re leaving behind with work. If not, you’ll eventually get tired of golfing, sitting on the beach, and watching the news.

This could mean volunteering your time, money, and talents to benefit a non-profit organization fighting for a cause you care about. It could be more time with family, maybe focusing on travel and experiences with kids and grandkids. It could also be some kind of consulting or part time work to help ease the transition into retirement, so long as it’s work you enjoy.

From a behavioral finance standpoint, the transition into retirement also requires a huge mental shift from what we’ve been used to. Our whole working careers, we’ve had money coming in the door to cover current expenses, we’ve been getting pay raises that are likely much greater than inflation as we progress through our career, and we’ve been socking money away for later use in retirement.

Suddenly, in retirement, we either have no income or very little income to cover expenses, we’re not saving anymore, and even worse, we’re spending down our assets instead. We might be tempted to track short-term performance of our portfolio and likely have a deeper level of interest for headlines and market news ranging from inflation, bear markets, political strife, banks collapsing, and whatever the financial crisis of the day that the loud people smashing big buttons and saying crazy things on TV tell us to care about. We’ve spent decades focusing on saving up for retirement to secure that bungie cord behind us, and now it’s time to take the leap.

This can be a major shock that causes a massive degree of anxiety and discomfort, perhaps to the point that you become scared to spend the money you’ve saved your entire life to use in this very moment. So, you might tighten your belt when you don’t really have to or go back to work at a job you don’t like when you don’t really have to. Neither of these are desirable outcomes.

So what are we supposed to do, just live in retirement carrying the heavy burden stress and anxiety? Not at all. But breaking through these mental barriers will likely take much more work than simply letting time pass. Fortunately, you don’t have to go it alone. It’s work we have decades of direct experience in helping hundreds of clients navigate through successfully. Here’s our process for doing just that.

  1. Acknowledge that feeling this way is very normal. The cause of this anxiety can be found in the deeply-rooted instinct of survival. We’ve left behind the comfortable security of a steady income and are now seemingly at the whims of the market now so more than ever. Be compassionate, take a deep breath, and cut yourself some slack.
  2. Have a plan. If you’re a Plancorp client, you already do. It’s your Financial Independence Analysis, a plan that has been collaboratively designed to align your money with your values and fine-tuned over time to help navigate through an unknowable future. Once you have a plan, stress test the heck out of it with poor market conditions (especially early on in retirement), expenses that are higher than expected, potential long-term care needs and medical expenses, extended life expectancies, and anything else you might be concerned about.
  3. Define your “abundant life”. Be specific. Who are you with? Where are you at? What are you doing? If money were no object, what would you be doing differently? Then, ask why each of these things are important to you. Then ask why at least 4 more times to get to the root of what really matters most to you in life.
  4. Build this abundant life into your plan to make sure it’s viable and give yourself a permission slip to do it. Set money aside for this specifically and commit to using it.
  5. Put your abundant life into practice. This might be difficult at first, but power through. It will get easier. Revisit your plan at least once per year to track progress, update for new life circumstances, and make adjustments as needed.


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Derek joined Plancorp in 2018 after spending the previous three years of his career as a financial advisor in Boulder, Colorado. As a CERTIFIED FINANCIAL PLANNER™ professional, he is passionate about helping people make financial decisions tailored to the life they want to live. More »