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Retirement Planning: Managing the Shift from Breadwinner to Retiree

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Are you preparing for retirement? If you are, then it’s likely that your retirement planning has mostly involved finances. For most American workers, preparing for retirement means planning for that day when your financial situation makes it possible to say good-bye to that regular paycheck. If someone asks, “Are you ready for retirement,” what they often mean is, “Can you afford to retire?”

But as this late-2023 Kiplinger article reminds us, the biggest challenge in preparing for retirement isn’t usually financial – it’s emotional. This article, written by financial planner Erin Wood, explains a fact that future retirees often overlook: retirement is actually among the most stress-inducing experiences the average person can have. Let’s take a look at what Wood has to say, and as we do, let’s ask ourselves, “Am I really prepared to retire?”

Preparing to Retire Means Dealing with Mixed Emotions

One of the lesser-spoken-about emotions surrounding making the transition into retirement, according to Wood, is anxiety.

“While some people leap into retirement with joy, delighting in the freedom to pursue their passions or spend time with the people they love, others struggle to get their footing,” she writes. “They’re not sure what they’ll do, how they’ll spend their time or even who they’ll be when work no longer gives shape to their lives.”

These mixed emotions along the journey from breadwinner to retiree are normal, and more common than you think.

“Astonishingly, retirement ranks 10th on a list of life’s most stressful events (higher than pregnancy and foreclosure),” Wood notes. “This shift signifies more than a financial change, although retirement happiness depends on getting that right, too. More important, this transition requires a profound shift in mindset.”

Preparing for Retirement Means Embracing a New Identity

In our society, for better or worse, we commonly tie our identities up with our professions. We don’t just teach; we say, “I am a teacher.” We don’t just do accounting; we say, “I am an accountant.” Our jobs are often the first things a new acquaintance will learn about us, aside from our name.

“We’ve all heard the advice that we shouldn’t let our jobs define us,” Wood writes. “But when you spend 40 hours a week for 40-plus years doing something, it’s hard for that not to become a core part of your identity.”

And being a breadwinner isn’t just about a paycheck. As Wood explains, “It’s also about what you do all day, the difference you make to others, and the social connections you enjoy.”

And maybe you’re looking forward to giving up the awful commute, the demanding boss, and the workplace drama…but letting go of the good stuff can be a simultaneous challenge. 

Preparing for Retirement Means Safeguarding Your Health

According to the long-term University of Michigan Health and Retirement Study of retirees, folks who retire are 40 percent more likely to have a heart attack or stroke, and the risk is especially high in the first year of retirement.

“That’s why I always advise my clients to retire to something, not from something,” Wood explains. “At least five years before retirement, start thinking about what your days will look like when you’re no longer a worker. In your imagination, a retirement filled with golf and relaxation might sound appealing. But give that idea a test drive, and you might discover it’s not really something you want to do all day, every day.”

Preparing for Retirement: Embracing Your “Second Act”

Wood says that those of her clients who love retirement are the ones who have used it as an opportunity to have a second (or third or fourth) act, in their lives. Instead of withdrawing, “[t]hey use the precious time retirement grants them to strengthen connections with the people they love and forge new relationships. Or they launch a business or volunteer or become more involved in their communities,” she writes.

Retirement is a perfect time to experiment and find a new way to engage with life. 

Preparing for Retirement: A New Dynamic for Couples

Wood points to the ads about retirement that depict happy couples walking on the beach and taking carefree bike rides. “In reality,” she writes, “retirement can stress relationships. You and your spouse may have become used to a certain rhythm in your relationship, perhaps with one spouse working exclusively outside the home and the other taking care of domestic tasks.”

But that dynamic will inevitably change. “Now you’re thrust together 24/7,” Wood writes. “You’ve probably never spent that much time together before. Will you get on each other’s nerves when this happens?”

This shift is reflected in the rising rates of divorce among older couples, commonly known as “gray divorce”. According to the U.S. Census Bureau, while the overall rate of divorce has been stable for years, the rate of divorce for people between ages 55 and 64 is highest among all age groups, at about 43 percent.

Flexibility is Key as Couples Plan for Retirement

As with all things in retirement, planning for this is essential. It’s important to take time ahead of leaving your work entirely to think through how retirement will change the dynamics of your life and relationships. Roles and routines may need to be reassessed. Flexibility is key.

“Some couples might welcome a chance to reconnect,” Wood notes. “But others might want to maintain their own activities and pursuits. Open communication about your needs can go a long way toward smoothing the transition from breadwinner to retiree.”

Preparing for Retirement by Re-creating a “Paycheck”

The loss of a steady paycheck can be a grief and a challenge that sneaks up on you, after you retire.

“The problem is that you’ve spent years — make that decades — accumulating a retirement nest egg,” Wood explains. “When you retire, you will need an entirely new skill set to make that nest egg last for the rest of your life. When looking at the sizable account balance at the start of their retirement, some of my clients feel flush and think they’ve got a license to spend like never before. I remind them that $1 million isn’t that much money when you parcel it out over 20 years or more.”

Wood advises her clients to create their own paycheck in retirement.

“There are several ways to do it,” she writes. “The right approach depends on your preferences and risk tolerance. For some clients, I recommend the bucket method, where we deposit a few years of expenses into cash accounts, while letting the remainder of the portfolio continue to grow. Other clients prefer more guarantees about their money, and we might buy an annuity to cover their fixed expense and round out their discretionary spending with their investments.”

But she warns that no matter what method you choose, the important thing is to pick one and stick with it consistently. “Jumping from one method to another to generate retirement income can result in investment losses if you don’t get the timing right,” she writes.

Preparing for Retirement: a Profound Transformation

It’s good to be excited to retire, and Wood notes that it’s not wrong to eagerly anticipate your farewell to the daily grind. “But remember,” she writes, “retirement signifies much more than merely escaping the hassles of your career. It represents a profound transformation in how you perceive yourself and how others perceive you.”

She concludes, “Retirement isn’t just an endpoint. It’s also a great opportunity to nurture your passions, fortify your connections with loved ones and even explore uncharted professional territories. By embracing the possibilities, you can make it a truly enriching and fulfilling phase of life.”

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We have big news! The long-awaited book by Rajiv Nagaich, called Your Retirement: Dream or Disaster, has been released and is now available to the public.  As a friend of AgingOptions, we know you’ll want to get your copy and spread the word.

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Rajiv then offers a solution: LifePlanning, his groundbreaking approach to retirement planning. Rajiv explains the essential planning steps and, most importantly, how to develop the framework for these elements to work in concert toward your most deeply held retirement goals.

Your retirement can be the exciting and fulfilling life you’ve always wanted it to be. Start by reading and sharing Rajiv’s important new book. And remember, Age On, everyone!

(originally reported at

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