08 Sep Are You Emotionally and Psychologically Ready To Retire – Podcast
In today’s episode Nicholas Olesen, CFP®, CPWA® covers part two of how to prepare for retirement, this time from an emotional and psychological point of view.
Retirement is one of the biggest life events you will probably ever experience. It is something you have worked and saved towards for a few decades. You may have dreamt about the day you can retire and do “what you’ve always wanted”. But have you thought through how you will feel transitioning out of the workforce? Do you have a purpose and identity outside of work? Do you have a community outside of work?
These are just a parts of the eight questions we believe will help you prepare for the transition into retirement.
You can find a transcript of today’s show below.
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Transcript from today’s show:
Hi, thanks for joining me on a wealth of advice. My name is Nicholas Olesen, Director of Private Wealth at Kathmere Capital. Today I want to follow up on the last podcast that we did, which was on the financial questions to ask yourself and considerations before you retire, how to prepare yourself financially for it.
And I want to take this from the psychological and emotional side of it. Because what we found is that this huge question, this huge decision, which you’ve thought about for a long time, you’ve wondered about you’ve dreamt about for a while. If you’re actually not ready for it emotionally or psychologically, it can be a really, really hard transition for you.
And we found that some people that we talk to kind of stay working longer than they should cause they’re not ready psychologically or emotionally. And, and some people leave too early and then have a really hard transition as well.
With such an important decision we’ve keyed up eight questions that we think you should consider. And these questions are really for you. There’s no right or wrong answer to these. These are for you to understand kind of what you’re feeling heading into it, kind of how you’re feeling about work and, and re identity and a lot of things that are very personal to it.
As I talk about with clients all the time and, and those that we’re meeting for the first time, a lot of our work is obviously based in analytics and finances and numbers and calculations and everything that has to do with making sure that we are putting together a sound financial analysis and strategy for you. But a lot of our work on a day-to-day basis with our clients is walking them through emotional experiences with things. Or how to approach things, in their marriage, with decisions they’re making, or how to think about, the career that they’re in and their identity with it and how to transition away from that.
So it is, it is a lot of therapy and psychological side of it. Yeah. That’s why these questions are so important for us to, to share with you. And that I want you guys to think about if you’re on the verge or thinking about retirement.
So, question number one is really the, the whole, how do you feel about your work? Are you excited on Sunday night, thinking about work the next day? Are you looking forward to finishing up tasks, seeing your colleagues? I know we’re in COVID live land still. I’m recording this in September 2021, where things are still starting to open, not open and, and all sorts of plans have been uprooted, but are you looking forward to it? Are you excited about maybe learning something new?
Or do you dread going? Do you not want to be there? Now, this is a very deep question to kind of kick things off with, but if your gut instinct is that you enjoy the weekends and you’re feeling pain walking into work the first day on a Monday morning, or you’re [00:03:00] just the anticipation of it makes you unhappy. Then it’s a tough one to kind of think. Okay. Yep. You, you really should continue working.
One thing that we have found with some that, that we’ve seen work day in and day out, even after they don’t have to continue working with. They were kind of hanging on to this work because it was where they found success and recognition and it, it made it so that they didn’t think about the things at home. And they didn’t think about the other decisions they had to make. They felt that this was their kind of refuge in a way. Now the beauty of it is, is working with some of these clients and then transitioning and kind of realize that. They spent some time and finding how to find joy and happiness in other places.
And so what we’ve just discovered is you need to go through this and look at it. It’s not the work itself. It’s what are you trying to walk away from? Or what are you excited about? So I know it’s a deep question to start things off with that’s where we’re going to kick it.
The second question is, have you thought carefully about your financial plan?
And this has to do with the last podcast. If you didn’t listen to it, please go back. We kind of covered a whole bunch of information that you want to think about leading up to your retirement years. Looking at it and saying, Hey, do I have the right numbers to retire? Do I have enough income coming in? Do I have enough assets to live off of? What are my expenses? What are they going to go up to when you just save and save and save throughout your working years? Harder than to think about what is it going to be like once I retire, like, is there something major that’s going to come about or have I really planned properly for it?
So obviously go back and listen to that one, that dives into a lot of details on it.
The third one is when you look at your already retired friends and relatives and colleagues, what do they do? What do they think? What is your experience interacting with? Know, yes, you are an individual and you’re going to have your own opinions of them.
But what I have found is that if you have a community and a group that you’re walking into, who can show you the joys and the excitements, and kind of gives you the ups and downs of retirement and the honesty of it, those that have walked into retirement and looked around and said, oh, I really miss this. Or I wish I had stayed a little bit longer or close the book on my working years in this way. You don’t have one who can talk you through that in that way, have a friend or two who have gone into retirement and, and have looked at it successfully and kind of love retirement. And then I would, it’s kinda hard, but I would talk to one who’s not enjoying retirement, so you can kind of see how you can not approach it in that way.
A lot of the time, what we find with clients is that when they walk into retirement and they’re not psychologically or emotionally prepared for it, it is, it’s a loss of an identity that they had in work that they didn’t realize was so important. And when we talk about identity, one thing to look at when you think about identity is where are you going to be now using the time that you had at work?
It’s a lot of hours between commutes and everything like that, that you’re spending on your career [00:06:00] and energy you’re putting into that. And we found that those that are our most successful in retirement and by successful, I mean happiest, when I talked to them and they just have so much joy about being retired.
It’s those that have found a community to give back to, to be around whether it’s a volunteer group or, a garden club or a, a golf group. There’s so many groups out there that you can participate in it. Doesn’t just have to be volunteering at an animal shelter or volunteering at those, it can just be people that you want to interact with and be around.
And why it’s important is when we look at happiness for individuals, those that are older, when you look at it, think of, of a 65 year old individual, what percentage of time are they around other people? , Again, if you don’t have a spouse, especially, or even if you do have a spouse, how much of your time is spent with other people?
For most people working, that’s your community outside of, , friends and family. And so the amount of hours that you have, quote, unquote, open now to decide how you want to spend it. You really want to find that group of people that you can be around.
One key one, and, and it’s, , just to touch on it here that we’ve, we’ve seen is there’s, there’s a few times in life where, statistically speaking, where you see higher percentages of divorce and marriage issues, and it’s, very soon after marriage, it’s right after children are born, it’s after children leave the home, and then the last one that we see most commonly is actually when people retire. And the reason why is because all of a sudden you have so much time to spend together where you had your kind of your own thing with work or your own personal time. So as much as I love when clients spend so much time together and it’s, it’s wonderful for some, you do need to have those separate groups and separate things that you like to do.
Don’t think of it that as a bad thing, that can be a very good thing for your marriage.
And the fourth question, when we look at it is, do you like part-time work for kind of a transition into retirement? Or can you in your type of role take on consulting roles and things like that to kind of pick and choose your hours?
This is one that we’ve seen really, really successfully for a lot of clients, which is, they transition out of a full-time work and then they go back to their company. But working as a consultant on their own time, just in the capacity and the role that they love the most. And they’re doing it 10 hours a week, 20 hours a week, nothing to the extent that they were before and financially, it’s, it’s a wonderful thing which we can talk about. And I think I touched on that on the last podcast.
When you look at it, we’ve just seen clients that have, again, something to give back to something that they can say, Hey, I accomplished this. Whether it’s learning, volunteering, or working, do have a really great transition into retirement. And. It is a very hard transition just to kind of cutting it cold Turkey.
So think about that. Think about if you are the type of person that, that would have the easiest transition going full-time to part-time to consulting to then out. It’s really fun too. We [00:09:00] had one client who retired and then got a call from a startup company and needed their services for a certain specialty that they had.
And, and they’re working. As a consultant for the company. And to me, it’s one of those fun things that they feel. And they sense how valuable their advice is. Yet they can choose their own time. They can choose their hours, they can choose the projects. It’s no longer a have to work. It’s a want to work. Which is just such a different feeling for those that have been able to experience it.
Now, the question number five that I have is do you have hobbies or interests that could fill your time?
Again, it comes back to this kind of volunteer work and how much you like being around people and things like that. But some people really have never taken the time to think about their hobbies and they’ve just been work, work, work. I just was speaking with an individual or a couple yesterday and they really just, I mean, it’s, it’s work then it’s it’s kids, while the kids are home, and then it’s work again after everyone goes to bed. And so they don’t have time to do the things that they care most about. And so a lot of our conversation was actually around, Hey, let’s talk about what this looks like today. You don’t have to just wait till you retire. Let’s find a way to explore those things that you might enjoy.
I have another individual that that I love talking about it because for her, her hobby and interest was always reading. But she never really had taken the time to think, Hey, what is that going to look like later? Like reading isn’t just a hobby or an interest. Like I can’t really spend all my time doing that. But that allowed her or opening up her eyes to say, Hey, what can I do with it. Now she’s writing a book. And it’s just one of those really cool things to see someone kind of come out of a, I don’t know what I’m going to do in retirement, to now be very excited about the time and energy that can put into a passion project, if you will. And they can just have so much fun with it.
One of the things that we’ve seen is those in the kind of 40 to 50 crowd as sad as it is, that’s kind of the most quote unquote unhappy part of, of individuals on kind of a scoring side of happiness metrics, if you will. And then, and then we see that it actually transitions quite a bit to those that are in their late fifties and the sixties, where all of a sudden, majority are fairly happy or very happy. And the reason, I think this is, is similar to this one, which is they’re choosing where they want to spend their time, their hobbies, their interests, their volunteer work, things like that. Where during your forties and fifties, you’re trying to grow your career, you’re trying so hard to focus on that.
So bring some of this balance back for those of you that are not close to retirement don’t need to kind of think about it emotionally or psychologically to get ready for it. Think about, Hey, what can I do today to put more time into those things? Maybe working the extra couple hours, isn’t gonna make a difference, but it will make a difference in 10 years when I look back, if I don’t explore this hobby.
And we’re wrapping up with three more questions here, number six is what friends do you have now that involve neither your career nor your partner?
And, and this question is really frankly, more to the men. And the reason why is, is women do a fantastic job in general against some huge generalities here? Of having [00:12:00] their friends, having those that they call or they text, or they spend time with outside of just, , their, their spouse and outside of their career. They have these groups, really good friends.
And , speaking from experience, most of my friends that I’ve gotten to know the majority of them kind of came through my wife. Whether it’s a spouse of one of her friends or it’s someone that she worked with and we got close and then I have my group of friends. But it’s interesting, and that if I, if I reflect back over the last almost two decades and think about it in that, so many of our groups of people that we spent time with was because of my wife.
So I asked this to men because one thing that we found is that those that have retired, they kind of hidden go into retirement and then they call up coworkers from the past and say, Hey, , you want to go to lunch or, or you want to kind of talk this or that. And you don’t have that bond. And so it’s hard for them to say, Hey, where else do I have friends?
A really interesting question in a survey that, that a psychologist did was they said, who is your best friend? More than 60% of men said. But less than 20% of women said my husband. And I find it very interesting because that is, , we are complimentary in marriages and partners and things, so you can be best friends with your spouse and partner. But you also should have other friends, other people out there. So before you retire, think hard about whether your social connections are going to grow and how to keep them healthy and how to kind of create new. In retirement again, back to this comes all back to this kind of emotional side, into retirement, retiring to a community or a group of people.
And second to last question is what role is your spouse, your partner, playing in your decision about retirement?
It should be a decision that is really yours, but at the same time, taking into consideration, your spouse or your partner. If they’ve already retired, are they pushing you to retire because they want to do that. Or alternatively, are they retired and saying, please don’t retire. Continue working so I can go do X, Y, and Z. Your relationship, your time together, your happiness, again, emotional happiness, and psychological happiness come from these relationships. And so you need to think about it. You need to talk about it and talk about, Hey, what does it look like to retire together, separately and have those conflicts.
And we have a lot of clients that do either one, we have them that retired together, , within a month of each other. And then we have other ones that retire years and years apart. And it really just has to do with what you’re doing outside of it. How those conversations go between you guys.
One thing that we’ve seen is that if you really aren’t looking at it together, I think you’re going to come into a kind of shock circumstance when one wants to retire and the other one says, no, you know what? I actually want to keep working. You have to have these conversations early.
I had this experience years ago where one had said, Hey, I’m ready to retire. But, but this other individual might, my partner won’t let me. And it was a, it was not a financial side. They, they were okay financially. The other individual was, was worried that that [00:15:00] then would force them to retire. That having their spouse at home and nagging on them, quote, unquote, to retire, to allow us to go on trips, to get out of work so we can go do X, Y, and Z. That was hard, that, that, that you have to have those conversations early, because if you don’t, you’re going to get to a crossroad and we hope that you can talk through it and work through it and figure out how to stay happily married or, or what have you. But it is a point of contention sometimes.
And so having these conversations early and having them kind of naturally progressed as you’re talking about retirement and talking about what it looks like are important and key to, again, this happy retirement, joyful walking into retirement.
And the last question is, do you and your partner have similar ideas about travel or where to live or what to do in retirement?
The number one reason in a, in a survey this psychologist did that people felt they might get divorced after retirement is because they didn’t know if the other individual, their partner wanted to live in the same place or have the same type of lifestyle. Most of the time, again, huge generalities here, most of the time women in a relationship wants to be near grandchildren, if they have them. And men in a relationship want somewhere they can do things that they enjoy hobbies. Sun, sports, things like that. And it’s really difficult to have these conversations, talk about them and figure out what to do with them.
When I look at it, the most successful individuals that I’ve seen that go into retirement and, and from again, an outside point of view and from really candid and honest conversations with them about a great marriage and a great retirement together are those that compromise. When they talk about, Hey do, do you love to ski and you want to retire to this location? Or do you really want to go out and do bike riding all the time? Or do you want to just go and, and be there for the family and things like that. Which, they’re all different desires and wants. And so again, talking through them and walking through the reasons and the thoughts behind them are key.
If you don’t have these conversations early, if you don’t start these conversations early, you’re gonna run into issues. For some, we’ve actually seen the most important part of them was where they live was not as key as the vacations that they took. And so you kind of accomplished both for a lot of our clients where they can choose to live near family, be around them all the time and then go on these great excursions and go on these great trips. And, and frankly, some of them are going on, guys trips and girls trips and things like that. This isn’t always do everything together.
So I, I say all of those to say, look, there’s a lot of things you need to think about walking into this. You have to be ready for it. So much of it comes down to identity of work. Is that who you believe, , is that where your identity is based? And then what is it that you’re retiring into? Again, retiring out, we can all kind of think of those things that we are looking forward to not having to do anymore or, or things like that. But, personally I’m a very long way away from retirement, but [00:18:00] I don’t have a desire to just retire and do nothing.
I also really love what I do. And so it would be very difficult for me to think about, decades down the road, wanting to get away and walk away from those that I work with every day, those that I build and serve every day their financial life. And so you really have to think about it.
Look retirement is absolutely fantastic. There’s a reason why we look at retirement with a joy and excitement, and we think about it and, , people do count down days and things like that. But it can be different. It can be hard to walk away from something that you have built. Some, something that has been a big part of you for such a long time.
I say all these things to say, please, these are all conversations, thought processes, journals, you name it, things that you need to think about to walk into retirement and have a really great successful, happy time.
So we really appreciate you tuning in. Please do email with any questions, reach out with anything that you want to talk about or if you need help, obviously that’s what we’re here for.
We hope you have a great rest of day. Take care.