Happy retirees often spend much of their careers actively laying the financial groundwork for their retirements. Careful deliberation about investment strategies, diligent and regular savings and other planning helped position them for a relaxing and financially independent life.
You expect you need to have saved enough to cover your retirement years. Wes proves that only gets you part of the way. Relationships, family, hobbies, volunteering, and being involved in community are central to your happiness.
Many factors can affect someone's ability to acclimate to retirement, including financial status, health status, personality, and proximity to loved ones.
Based on their responses, the No. 1 challenge people faced in retirement was not being able to replace the social connections that had sustained them for so long at work.
“The main issues for retirees are replacing income in an inflationary environment, preparing for unknown future healthcare costs and long-term care costs, and feeling confident to spend money when they have been good savers,” says Emily C.
These tips can help. As saving for retirement has become more of an individual obligation, many workers and retirees wonder if they have enough money saved. New research shows the biggest concern among those cohorts is outliving their assets.
As a general rule, early retirement leads to a longer and happier life. The optimal age is your mid 50's, when you're still young and healthy enough to enjoy everything. The only caveat is ensuring sufficient savings to support your desired lifestyle.
Common challenges of retirement include:
Struggling to “switch off” from work mode and relax, especially in the early weeks or months of retirement. Feeling anxious at having more time on your hands, but less money to spend. Finding it difficult to fill the extra hours you now have with meaningful activity.
A major way to beat boredom in retirement is by picking up new hobbies. Some people think that reaching retirement age means they're too old to try new things, but this couldn't be further from the truth. Most retirees find that they have a renewed interest in learning new things and exploring their hobbies.
The study showed that those in retirement spent less time on things like working, educational activities, and caring for others like their children. They spent more time on things like personal care, eating, household activities, shopping, leisure, civic activities and talking on the phone.
After leaving the workforce, people may struggle to find new friends and social activities to fill the time once spent with coworkers. Additionally, changes to income, routine, and independence can worsen feelings of loneliness in retirement.
You may feel lonely because many of your friends are at work. You may be bored. The activities you try may not challenge or engage you. Many retirees feel they have lost their sense of purpose.
Expect to Go Through Stages of Emotions
There's an emotional process that most people go through when adjusting to retirement. At first, there's a feeling of freedom. It's like you're on a vacation that's going to last forever. That sense of novelty wears off, however, and you will settle into a slower lifestyle.
The best time to retire for tax purposes in Australia is generally once you attain age 60, as it is at this stage that you will have tax-free access to your superannuation.
The average retirement age in Australia is 55
And on average, Australians can expect to live to 85 for women and 81 for men (ABS, 2021). So depending on what age you retire, this means you could need your retirement savings to last up to 30 years.
Generally, people who have retired early said they were happier, had better relationships with family and friends, and had improved mental and physical wellbeing. However, 47% of early retirees said their finances had worsened.
However, if you are unable or unwilling to deal with change at work, learn new job skills, or experience anxiety, stress, or other negative emotions in response to changes that affect your job-it may be time to consider retirement.
Retirement anxiety is an emotion of concern or worry, experienced by people yet to retire, about the prospect of retirement. Examples include concerns about how they'll fill their time, financial worries and feeling a loss of identity.
Some retirees struggle with the loss of structure and identity they had while working. Others are bored. People who retire for health reasons, face financial difficulties or leave their jobs involuntarily find the adjustment especially challenging.
Some common retirement mistakes are not creating a financial plan and not contributing to your 401(k) or another retirement plan. In addition, many people take their Social Security distributions too early, don't rebalance their portfolios to match risk tolerance, and spend beyond their means.
Rising health-care costs, market volatility, and inflation are just some of the risks that add to the financial uncertainty of retirement. These risks and others are among the things people need to keep in mind as they move closer to retirement.