The transition from a productive working life to retirement can be difficult. Many retirees say it’s more complicated than they expected. As with all major transitions, some things will make the process smoother and easier to adjust to. But, unfortunately, some things can also cause more difficulty than expected. The key is knowing what those things are so you can be prepared for them and even avoid them if possible.
That’s what this post aims to do: look at some of the challenges people face when adapting to retirement and offer ways around or through them where possible.
What factors affect our ability to adapt to retirement?
Adapting to retirement is a process that depends on many different factors. Scholars and academics have long studied what goes on in our minds during this time of change to understand why some people adapt so well while others struggle so much.
Three main theories aim to make sense of our ability to adapt to retirement based on different factors. The following is a summarized and easily digestible take on these theories.
Role Theory: Disruption in our current roles in society impacts our well-being in retirement
One theory that aims to tackle this issue is Role Theory, which basically states that a person’s identity is defined by the different roles they play throughout their lives.
Since retirement has the potential to disrupt some of those roles, our ability to react and adapt to those changes defines how well we’ll adapt to retirement as a whole.
In other words, well-being after retirement depends on how retirement impacts our roles in society, how those roles define our identity, and how well we adapt to changes in those roles.
As a general rule, people who focus on work more than the average Joe and who have trouble adapting to new roles later in life have a tendency to suffer from anxiety and even depression during retirement. The key in these cases is to either find new roles to fill the void left after you stop working or make retirement a more gradual, less abrupt process.
How to Tackle this Problem
You can tackle the first by picking up a new hobby, retaking an old one, volunteering, learning a new skill, or even going back to school. The second approach depends mainly on the job you have before retirement.
Taking on less responsibility as time goes by and dedicating the extra time to a hobby, for example, can make the transition smoother. If you have your own business, you can begin by taking your operation online with a virtual office that you can manage remotely.
This can even let you get a head start on traveling while someone else takes care of all your incoming physical mail and forwards anything of importance to your current location.
Continuity Theory: Maintaining non-work-related roles and relations are crucial
Continuity Theory has been around for over 50 years, yet it still seems relevant in today’s rapidly changing society. This theory states that the disruption of an individual’s role (or roles) after retirement isn’t as crucial to our well-being during retirement as the Role Theory seems to imply.
Instead, it proposes that there are other sources to our self-identity that are equally important for the transition to retirement, and it’s the ones that we manage to keep that help us adapt to this new stage in life.
In other words, according to this theory, it’s the continuity of our social relationships outside of our workplace and of other factors such as the roles we have in our families or our circle of friends that have a more substantial influence on our life after retirement.
Lifecourse Theory: Our personal history determines how well we’ll adjust
A more recent theory is Lifecourse Theory, which focuses on how each individual’s trajectory in life defines how they’ll adapt to retirement. This is a more complex theory than the previous two, but that’s just because people and their lives are complex.
In a nutshell, this theory states that we can see retirement as a transition in an ongoing life trajectory. Consequently, adjustment to retirement is influenced by previous life events (not roles) related to our work (i.e., our work history), family, social network, and more.
Some of the conclusions that arise from this theory are:
- Men with unstable careers or who experienced long periods of unemployment tend to suffer from more psychological stress and depression during retirement.
- Women, in general, have a more discontinuous job history because of maternity and other factors, which sometimes hinder their ability to climb up the corporate ladder and access better pension plans. This ultimately affects how well they adapt financially to retirement.
- The discontinuity in many women’s work lives and their frequent transitions between different roles sometimes makes them better than men at adjusting to the role changes implied in retirement.
These are but a few of the most prominent conclusions that prove that the sum of our entire work history, as well as our social and family history (what authors call lifecourse), is what determines how happy we’ll be during retirement.
Other contributing factors
The following are a set of more specific and equally important factors that some researchers have found to be linked to how we adapt to retirement.
One of the most vital factors that influence our ability to adjust and adapt to retirement is education. There is a clear correlation between happiness as a retiree and the level of education. Postgraduate retirees score over twice as much as those with only primary education when adjusting to retirement.
There are many reasons why a higher level of education increases our chances of adapting to retirement. First, people with a college or postgraduate degree tend to be more financially literate and therefore make better decisions throughout their lives in preparation for retirement than those who don’t have one. This ultimately translates into a smoother transition.
It’s also true that people who are more educated are less likely to overreact to specific adverse events during retirement and to be more resilient, in general. This means that they’re less likely to feel anxiety during downturns.
Along with the level of education, financial stability is paramount to a calm and enjoyable retirement. It significantly reduces the stress caused by uncertainty, and it helps cope with many problems related to retirement, such as health and legal issues. Financial stability also allows retirees to maintain good health, carrying out all their plans such as traveling the world, starting a new hobby, volunteering, etc.
Who adapts better to retirement, men or women?
There are significant differences in how men and women adapt to retirement. For example, research in the US has shown that more men report being satisfied with retirement than women. At the same time, there’s a higher proportion of women who report distress during retirement.
Of all retirees, those who are still married are by far the best at adapting to retirement. This is most likely due to mutual support as well as shared plans and goals between spouses. Yet, curiously, they’re closely followed by divorcees. Perhaps due to feelings of loneliness and depression, singles and widows show a significantly worse ability to adapt.
The job we had before retiring
As we saw earlier, our work history impacts our ability to adjust to retirement. However, it’s not just about the entire work history but also about the last job you have right before retiring. Suppose you retire from a job where you had a lot of responsibility and high status within the organization.
In that case, odds are retirement will have a more substantial impact on you compared to someone who retires from a lower-end job. The logic behind this is that the higher your job status, the more you are identified with that role, and, therefore, the more disrupting the transition to retirement will be.
Tips to help you adapt better to retirement
After covering some of the things that affect our ability to adjust to retirement, here are some tips to help you prepare, based on the most influential factors:
Tip #1: Stay in school
As we saw, education is one of the most critical factors that determine our ability to adapt to this new stage in life. If you’re already in school working towards a degree, press on. If not, there are many different options for every budget, all kinds of students, and all backgrounds.
If there isn’t a particular career you’re interested in right now, consider taking courses in personal finance. That will directly impact how you prepare financially for retirement and manage your money when you retire.
Tip #2: Work to improve your relationships
Having a partner to share retirement with strongly affects how we cope with the stress of changing times during retirement. Also, keeping in touch with friends and family members throughout this time helps maintain an essential part of your personal identity when you retire. This makes the transition smoother and easier to handle.
Tip #3: Start working on your retirement plan as soon as possible
This is an obvious piece of advice but one you should never overlook. As stated above, financial stability is one of the critical factors to an enjoyable retirement, and the best way to get there is to start saving early in a 401(k), IRA, or other retirement account and let the magic of compound interests do their thing.
Tip #4: Learn new skills whenever you can
Only too often do we stick to our guns once we find a stable job and then let that job define us. Unfortunately, this only makes retirement harder since you end up losing much of who you perceive yourself to be. However, by learning new skills and practicing them regularly during your working years, you diversify your roles and reduce the negative impact of retirement.
Plus, there’s the added bonus that you can then use those skills to generate extra income during retirement, so it’s a win-win situation.
Tip #5: Build sources of passive income
Many people retire simply because they don’t want to work anymore. This is perfectly understandable. However, retiring means that you’ll no longer have a steady paycheck coming in every month. This would make financial stability an issue, significantly if you didn’t save enough for retirement.
One way around this is to begin working on sources of passive income before you retire so that, by the time you do, those sources will cover most if not all of your expenses for the remaining years you have left.
There are dozens of options for generating passive income. Some include investing, running a blog, renting out your home or spare bedrooms, renting out your car, etc. The sky’s the limit.
The Bottom Line
The key takeaway from today’s post is that we shouldn’t look at retirement as an isolated event. Instead, you should see it as an integral part of our development as human beings. Therefore, we must be mindful of it during our entire adult life, not just at the end of it.
Everything from the career choices we make early on and the roles we play in society and in our families can impact our golden years in different ways, just as much as our choices on what we eat when we’re young affect our health later down the line.
To summarize, being financially prepared for retirement is just one aspect you need to consider during your working life.
Preparing for retirement isn’t just about avoiding ending up old and broke. It’s also about preparing mentally and socially for the transition that lies ahead.