5 Reasons Why People Hate Thinking about Retirement

November 19, 2018

Over 10,000 Baby Boomers are reaching retirement age every single day in the US. This will go on every day over the next 12 years. Not all of them will officially retire but in most cases, as workers reach the magical age of 65 the clock is ticking.

This is not only happening in the US but across the western world as an increasing proportion of people are in the 65+ age bracket.

Many surveys show how unprepared current day retirees are not only financially but also emotionally.

According to a recent Vanguard study, the average 401(K) balance for people in the 55–64 age group is $178,000. That is not a lot to distribute over a lifespan that may last another 30+ years. Even worse, it is reported that a full 45% of Baby Boomers have zero savings.

Surveys also show that many people enjoy a brief honeymoon when they first retire but that after a couple of years they express disillusionment and lack of direction. According to a 2017 Rand Corporation study, a full 40% of retirees go back to some sort of work within the first couple of years after retirement.

Interestingly the reason most often cited for going back to work had little to do with finances. Some retirees obviously needed the money to fund their lifestyle but the vast majority said that going back to work restored in them a sense of purpose and social engagement. Using their brain was another often cited reason.

The transition into retirement seems to be a hurdle troubling many people these days.

For one, the data shows that many people actually are forced to retire before they had planned to do so. A recent study by Voya Financial found that 60% of retired workers were forced to leave the workforce before they had planned to due primarily to health concerns and company restructurings. These early retirees might have been anticipating their retirement but life threw a monkey wrench into their plans.

Another contingent of retirees reaches their target finish line but they have been so busy with their careers or distracted as to not pay much attention to what their next phase in life might entail.

They are like sprinters putting everything into reaching the finish line but unprepared for what is next. In fact, many of the people interviewed in the Rand Corporation survey indicated that they needed one or two years of being away from the daily grind of a career to decompress and be able to see straight.

Why do so many people hate thinking about retirement?

While the exact timing of when a person retires may be somewhat uncertain due to outside forces we all know that the day will eventually come. Why don’t people plan ahead if they know that the transition is coming? It would seem to make sense, but maybe there is something more to it!

1. They are in denial and don’t think that retiring will be a big deal

They keep going as usual and expect to stop on a dime. Besides no longer going into the office what would change? The house is the same, the spouse is the same and the kids are the same. Just keep going as normal.

The only problem with these assumptions is that while some things like the house, spouse and kids do stay the same a lot of other things will change. How you spend your days certainly will. Some changes will be invariably positive like not having a commute. Other changes like the loss of identity, paycheck and social connections are also difficult for most people to handle.

Retirement is a big change for most people. It represents the ending of a phase of your life where you probably spent 30 to 40 years. Like all endings, there is usually a period of mourning or at the very least uncertainty as to what is next.

Is this you? Planning ahead can alleviate a lot of the tumult of not knowing what is next. Retirement is the tenth most stressful life event according to the Holmes and Rahe Stress Scale. Wouldn’t you want to keep this stress at no higher than №10?

“If you fail to plan, you are planning to fail”

Benjamin Franklin

2. They know retirement is a huge transition but they don’t deal well with change

Fear of the unknown is what often holds us back from dealing with change. What if we make the wrong decision? How do we even start making decisions about something like retirement that we have never gone through before? The result is often procrastination.

Throughout our lives, we go through many transitions. From the time we are born we go through change. Some transitions are tougher than others and take more time.

According to William Baldwin in his book Change all transitions involve the realization of an ending, a period of time in between involving introspection and uncertainty (the neutral zone) and finally a new beginning.

Sometimes change happens due to external factors and sometimes change is due to what is going on within you. In the case of retirement, you have both types of change — our work is ending and at the same time our sense of identity and how we fit in the world is changing as well. Our social and family relationships are also evolving further complicating our transition into retirement.

It is easy to hope for the best and procrastinate thinking about your life in retirement.

Is this you? Change is going to happen to you whether you like it or not. Transitioning into retirement is a big change for most people. You can’t control everything but planning your life in retirement both from a financial as well as non-financial perspective will empower you and your spouse/partner.

You are in charge of designing the life you want in retirement. Unexpected events will happen and even the best-conceived plans will need to be adjusted.

Developing a growth mindset as well as a resilient attitude will be important to deal with change for the rest of your life. Why not start now?

3. They fear the loss of identity and nothing scares them more

Fear has a way of freezing people up. So many people identify with the job they do. It’s Joe the CPA, or Linda the software engineer. When you retire it is hard to identify with your previous job any longer.

Suddenly, your Linkedin profile reads “Retired”. It almost sounds like you have disappeared from society and without the cover of a job title useful to the world.

Identifying with a job brought on a certain response from people. If you identified as an engineer you were good with numbers and smart. If you identified with being a designer you were creative and outgoing.

Now you are just Bob or Jane. But who are you really? What descriptive shortcut are you going to offer people you meet for the first time?

Is this you? Retiring involves a loss of identity that must be restored to reflect the real you. Finding the real you may take time and introspection. Retirement is the perfect time to define without pretense who you are.

Your life experience makes you relevant and your contributions to your family and society do not stop when you retire. What are your core values and is your behavior consistent with these values?

4. They have ignored their finances and hope has become their only way out

Money is a key ingredient of your retirement wealth. So are your physical and mental health, social connections, your lifestyle and your work and passions. But money is required to lead a certain type of life.

When you have a steady paycheck you can hide a lot of bad habits. Who needs a budget as long as the checking account is in positive territory?

Without a paycheck, you must be more careful with your money. You now must budget your money and be smart about how you invest your savings. Unless you have a pension to count on besides Social Security and other forms of pension welfare your lifestyle will now have to be funded by your savings.

If you have that sneaky suspicion that your financial house is not in order you might decide to simply ignore reality. Pretending is better than facing the truth. Many people hope for the best and keep their fingers crossed.

Financial brokers often tout a “number” required to retire. The “number” is usually in the millions. And you know that you are nowhere close to that “number”. You need to run an 8-minute mile but your best time is north of 10 minutes. You give up trying as the end goal seems too far away.

Is this you? First, know that your “number” may not be the same as somebody else’s “number”. Maybe you have always led a frugal lifestyle and with your social security benefits, you only need to use a small percentage of your savings to lead the life you have envisioned in retirement.

Second, even if you feel that you are behind financially, starting today is always a better option than postponing the inevitable.

Why not admit that you need help and make an appointment today with a wealth manager specialized in retirement planning?

5. They get easily overwhelmed with the complexity

Retirement planning can be complex. The financial side of preparing for retirement can be hugely complicated and overwhelming to lots of people. Throw in there the emotional side of retirement and things really get jumbled up.

When you retire you are dealing with a lot of change. Your relationships are changing, the source of your income is changing, your identity is in question, and there is no longer an HR department that figures out your benefits package. On top of that, you are now responsible for filling that time slot previously allotted to your job. You may feel a bit lost and chances are your spouse/partner is feeling the same.

You also have to figure out how to draw down your savings and manage your investments so they last the rest of your life and keep up with inflation. Don’t forget about the need to decide the best time to take social security benefits (age 62, 67 or 70) and get all those legal documents (will, health care directive, estate plan) in order. And figuring out Medicare and its various supplements is not for the faint of heart.

Retirement a la Carte sounds great in principle but as the book The Paradox of Choice shows too many choices can easily overwhelm us, leave us stressed and regretful. Isn’t retirement the time to relax and take it easy?

Is this you? Feeling overwhelmed and stressed? Not sure what to do or even where to begin? In an ideal world, you would start thinking about retirement at least five years before your target date. Are you over this mark? It’s never too late but professional assistance may be necessary.

For most people, the goal should not be to become a retirement expert.

Instead, the goal should be to become an educated consumer of retirement planning services. Let a professional retirement advisor simplify your choices and lead you in the right direction.

If the source of your stress is mainly financial consult with a wealth manager specialized in retirement planning.

If your source of stress is primarily non-financial consult a retirement or life coach that can help you design a vision of your retirement consistent with your goals, motivations, and values.

There is no better time than now to plan the rest of your life. Will waiting to ask for help buy you more time?

The best time to plant a tree was 20 years ago. The next best time is today.

– Old Chinese Proverb


If you are looking for additional perspectives to guide you as you formulate your vision check out our Retirement Wealth Checklist.


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About the author

Eric Weigel

My goal is sharing my experience as an investment manager, certified retirement coach, and fellow Baby Boomer to enable people to design the life they want and that matters to them in their next phase in life. We all want to live longer, but we also want to lead a life of meaning, joy, and fulfillment.