February 2011

Retirement is also a state of mind

A growing number of studies show that you need a psychological plan for retirement as much as a financial plan. Will you be ready?


In Canada, the number of people 65 and older will double by the year 2028, and average life expectancy will be in the 80s. But if all those happy retired folks turn out to be not so happy, the country could find itself facing a public health issue with significant financial consequences.

That’s why we are hearing more and more about developing a psychological plan for retirement. Obviously, this is not the kind of service you’ll get from your financial services professional, but it’s something you might do well to think about, starting now.

Looking reality in the face

Ah, retirement! Finally, there’s enough time to read, golf, do photography, play the guitar, travel… but then what? When you stop working, you free up a huge amount of time – about 2,000 hours a year, or a total of 50,000 hours if you are retired for 25 years. Are you going to spend 50,000 hours playing the guitar?

Such figures help many people realize that retirement is not an extended vacation. It’s a period of transition toward a whole new “career” that can be almost as long as the one just ended, and for which they must prepare.

Making sure you still matter

Psychologists talk about three major changes that occur when people transition from working life to retirement:

  • Your identity: You are no longer “Joe, the manager at ABC.” So who are you now?
  • Your relationships: You don’t see your old co-workers on a daily basis anymore. (In fact, they’re too busy to return your calls.) Whom do you see? Are you really interested in having lunch with your spouse every day?
  • Your purpose: What do you want to accomplish now? What challenges do you want to take on? What is your mission?

The important thing is to remain socially and even professionally active, so that you continue to “matter” in the world. Otherwise, retirement can quickly become a source of distress. Studies have even shown that retiring too early can accelerate the loss of cognitive function in people in their sixties, because they are deprived of a demanding environment.

What’s your profile?

There is no “one size fits all” plan for retirement. Just as we each have our own investor profile, we also have our own retirement profile. Some people will pursue their careers, while others will explore new avenues, and so on.

Whatever the case, all retired people have to deal with a new reality: now that their choices are less influenced by external forces – particularly not by an employer – they are fully responsible for motivating themselves and making their own decisions. And that’s not always easy to deal with!

A few tips

To repeat, everyone must prepare for retirement according to his or her own profile. But here is some valuable advice, no matter how many years away retirement may be.

  • Recognize that retirement lasts a long time. Have you changed jobs several times during your working life? There will be just as many transitions during retirement. You must plan for more than just the first day.
  • Don’t look at retirement as a stopping point. It is a gradual passage to another stage of your life or career. In fact, fewer and fewer people ever actually experience one specific day on which they “become” retired.
  • Stay active – intellectually, physically, professionally and socially.
  • Are you sick of work and looking to retirement as being set free? Ask yourself whether you could be suffering from burnout. An extended break might be better than a hasty retirement.
  • Do you dream about doing certain things after you retire? Do them now. You’ll find out whether you really want to do them over the long term – and spend all that time with the people involved.
  • Conversely, do you have trouble imagining what you’ll do when you’re retired? Don’t wait to develop interests that aren’t related to your work.
  • Think about where you would like to live. Will you take advantage of retirement to reinvent your routine?

In short, preparing psychologically for retirement is as complicated as preparing financially. And the former could even impact the latter, depending on the choices you make.

Have your reviewed your “psychological portfolio” lately?

Recommended reading
Revitalizing Retirement: Reshaping Your Identity, Relationships, and Purpose, by psychologist Nancy Schlossberg, published last year by the American Psychological Association.