Guides

How to cope with transitioning to retirement

5 minutes

Navigating a smooth transition to retirement can help you achieve your goals and dreams and ensure you're financially stable when you stop working.

Modern retirement looks very different from what it once did. In the space of a few generations, our view of life after work has dramatically changed.

Your grandparents and even parents probably saw retirement as an opportunity to relax, unwind, and enjoy a slower pace of life. Today’s retirees are more likely to create exciting lifestyles and explore new opportunities when they’ve left employment.

If you’re approaching one of life’s biggest milestones, or want to cut back on traditional work commitments, navigating a smooth transition to retirement can help you achieve your goals. From finances to lifestyle planning, this guide will help you discover more about coping with the transition to retirement so that you’re ready and prepared.

How can I transition to retirement?

Retirement gives people a new sense of freedom, but it also throws up emotional and financial challenges when you leave the workplace for good. Our jobs are a big part of who we are, and clearing the desk or packing up the uniform one last time can be difficult for anyone.

Retirement planning expert Mitch Anthony once said that for retirement, “You need enough purpose to wake up in the morning and enough money to sleep at night.” But how do you go about it, and how do you ensure you get maximum comfort and enjoyment from your retirement?

The focus of retirement shouldn’t be the work or occupation you’re retiring from, but rather the next exciting phase of your life and how to spend this precious time and extra freedom. But when you’ve spent 30-plus years working or in employment, retirement can seem daunting.

However, with people living longer, planning for retirement has become more significant than ever. For instance, men who retire today at the age of 65 have an average life expectancy of 85, and a 25% chance of reaching the age of 92. For women, this rises to 87 and 94 years respectively. Given retirement could equate to another third or half of your life, it’s important to make it purposeful and have the right processes in place, however that may look.

Here are some helpful tips for making a positive transition from working life into retirement.

1. Assess your finances

One of the first questions people ask when considering retirement is; Can I afford it? It’s vital that you understand your options and seek financial advice to gain an honest and accurate assessment of your financial affairs. Not only is this crucial to your wellbeing, but it will help you leverage the most out of your pension, retirement provisions, and any other savings or assets you may have.

When reviewing your finances, you may think about the major factors in life that could influence your spending during retirement, and the provisions you’d like to make for others. These include:

  • Your health and wellbeing
  • The lifestyle you want in retirement
  • The cost of living in your current home
  • The value of your outstanding debts (mortgages, loans etc)
  • The assets you wish to leave for your children, loved ones, or chosen beneficiaries.

With so much to consider, financial planning and saving for your retirement often starts many years in advance. There are many types of pension that can help you prepare for retirement and provide you with an income when your working days are over. Similarly, if you’re unsure when you’ll qualify for a state pension, you can also work out your state pension age using this UK Government tool.

2. Prioritise your health

To enjoy your retirement to the full, it’s important to have good physical and mental health and financial security when you stop working. If your general health has suffered, or if you’re concerned about depression or anxiety in retirement, you may benefit from professional medical help. Similarly, if work once took up most of your time, retirement offers an opportunity to exercise more and live a healthier lifestyle. Not only will this reduce healthcare costs, but it will also help you get maximum enjoyment from your golden years.

Research has shown that remaining active is one of the best things we can do for our mental health, and this is true for anyone transitioning into retirement or still in employment. Any level of physical activity is good for you, so it’s better to find something you enjoy as you’re more likely to keep it going for longer.

3. Set achievable goals and targets

There’s more to planning for retirement than pensions and savings. While good financial management helps achieve a smooth and comfortable transition into retirement, there are many other factors to consider. How will you fill your day? What will you do with all this spare time?

Retirement can have a dramatic effect on your sense of identity because it is no longer tied to your job or profession. Instead of being free, relaxed, and fulfilled, reaching retirement can feel like an anticlimax and leave you grieving the loss of your old life.

Goal setting is a successful method used in retirement planning. It gives your day structure and something to look forward to and work towards. You may want to travel, improve your fitness, or read more. Or you may want to relax and enjoy the extra time with your family that retirement can provide.

4. Structure your days

Before retirement, you most likely had a set routine structured around your working day. Research has shown that maintaining habits and routines is beneficial to mental health as you transition into retirement.

If you’re used to following a schedule, you might create a new routine for your retirement that will help you plan your day. It allows you to experiment with activities, hobbies, and projects until you find a timetable that suits your new lifestyle. This could mean something as simple as setting time aside for a cup of coffee while you scan the newspaper, spending time with family or loved ones, or putting an afternoon aside for volunteering.

You don’t have to go overboard, and you don’t necessarily need a rigid programme, but following some level of routine and creating a retirement plan can help you retain a sense of ‘normality’ when your working days are behind you.

5. Think about getting another job

Retiring from your job doesn’t mean you have to stop working altogether. You may decide that you’re not ready to leave the workforce entirely and have more to offer. It’s at this stage that some retirees take on a secondary career or a new job that will bridge a career gap. Not only can this add more structure to your day, but the additional income can supplement your pension and boost your savings until you finally decide to stop working for good.

These ‘bridge’ jobs are often part-time and less stressful than a primary career. Whether based in the local community or working from home, having a fresh challenge to focus on can provide physical and mental benefits for those transitioning into retirement.

However, not all retirees want another job or return to the daily grind they’ve left behind. It could be that you’d rather enjoy the same benefits you received in employment by devoting your time to volunteering. You may decide to help out at your local school or library, volunteer at the nearby hospital, or fundraise for charitable causes. Keeping busy can help improve your mental and physical health, retain social ties, and provide a sense of purpose.

6. Retire in stages

Retirement doesn’t have to happen all at once, and you may decide to phase your retirement by gradually reducing your working hours. This will allow you to remain in employment while benefitting from a lighter workload and less stress.

Many employers will support employees who wish to work towards retirement in stages rather than leave the workplace on a specific date. Not only does this allow the employee to steadily adjust to retirement, but it also means the employer continues to benefit from their expertise and has more time to recruit a suitable replacement.

7. Get social

It’s easy to feel lonely and socially isolated in retirement. According to research, 1.4 million older people in the UK are often lonely, and retirement often adds to the sense of isolation for those whose working life is behind them.

There are many things you can do to combat loneliness and make the most of this new period of your life, and it’s important to remember you’re not the only person who feels alone. Find new ways of spending time with others by joining a community group, becoming a volunteer, signing up for a yoga class, or meeting new people online – remaining active and positive can help reduce the feeling of loneliness during retirement.

Do you need help putting your pension plans in place as you transition into retirement?

At LV=, our friendly advisers are available to help you get your pensions ready for the retirement you want to enjoy. Contact us today.