Money: Handling the First Year of Retirement

The first year of retirement can be tougher than you think. For some, money is the least of your worries.

Retirement is supposed to be easy. But it can be tough. And being comfortable financially is just one part of a happy and successful retirement.

Retirement…blues?

Multiple surveys, including a new one from the Alliance for Lifetime Income, show that most Americans worry that they will outlive their savings. But for those who didn’t plan how they would spend their time, retirement can be both stressful and boring. In fact, surveys have shown that retirees are prone to depression and loneliness. One study estimated that a third of retirees experience symptoms of depression in retirement.

“The first year is certainly an adjustment,” says Ross Hamilton, vice president, wealth management with The Minor Group of Raymond James in Bethesda, Maryland. “It’s a big change emotionally and psychologically. And trying to plan that out ahead of time is really, really important.”

“It can be overwhelming,” he says. “If you can get ahead of that, and kind of narrow down the list of things that are uncertain, you’ll have a lot more confidence as you enter that first year. And that will really allow you to focus on the non-financial things.”

Moving in Retirement

He says retirement can be especially jarring to those who buy new homes in retirement that is in new cities and states away from their friends and former colleagues.

“Shifting from work to retirement is a financial event. It is an emotional event. It’s a lifestyle event,” he says. “And you know if you can get the financial piece of it squared away ahead of time, it allows you to focus on the other things. The more work we can do ahead of time, the easier that transition, the more enjoyable that retirement will be.”

One Retiree’s Experience

Jeanne Thompson, former senior vice president at Fidelity Investments in Boston, can tell you how tough it was.

“The first year was tough,” says Jeanne Thompson, a former executive at Fidelity Investments. She took an early retirement buyout at 54 and says it took her a year to settle down and figure out what to do with her life. Her two children were in college and her husband was still working.

“I had a vision of the time to travel and be a free spirit,” she says. “And like you go on a trip for a week and then come home. And then then I realized how my identity was tied up in my job. I was raising kids; and my aging parents, and all that. It was all this family stuff and my job, and I didn’t have time for hobbies and interests.”

Shifting gears

She said for years she did nothing but take care of people and work a very demanding job. “And then my parents passed away,” she says. “My kids were gone, and I had an empty nest. And I’m walking around the house like, what’s next? I had an existential crisis.”

Making sure you are financially ready to retire is a huge part of retirement planning. But Thomson says she focused only on the financial part of retirement and neglected to plan for the other part. She had read the studies about people needed to plan for the social part of retirement, but she didn’t really buy into it. “I didn’t think it wouldn’t happen to me.”

She says part of the problem was she wasn’t quite ready to retire, but a buyout speeded up the process. “I ended up retiring probably three or four years before I wanted to,” she says. “Even though I was financially ready, I wasn’t actually ready. I was 54 at the time. I thought I wanted to retire early but at 58. And so it felt like I did I wasn’t mentally there.”

Thompson eventually figured it out, and now she’s busier than ever. She’s “corporatized” her life. She started writing and is about to publish her first book. She created a schedule, which allows her to know exactly what she would be doing the next day. She started doing TikTok videos (@jdawgretires) and has 11,000 followers, and she coaches people.

One thing is for sure. Her experiences have changed the way she will coach people about retirement. “The money matters. But it’s the rest of it that people struggle with.”

YOUR TURN:

What was your experience of the first year of retirement like? Share your tips in the comments!

 

Rodney A. Brooks is the former deputy managing editor/Money at USA TODAY. His retirement columns appear in U.S. News & World Report and Senior Planet.com. He has written for National Geographic, The Washington Post and USA TODAY. The author of “Fixing the Racial Wealth Gap,” Brooks has testified before the U.S. Senate Special Committee on Aging. His website is www.rodneyabrooks.com.

 

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