Retirement is one of the most significant changes you’ll experience in your life. After working hard for decades and contributing to your savings and pensions, it’s finally time to reap the rewards. While many people relish the opportunity to spend time with family, travel the world, and engage in new hobbies, the transition to retirement can be challenging for some.

Indeed, research by the Financial Services Compensation Scheme (FSCS) revealed that 24% of retirees said stopping work had a big effect on them emotionally. Additionally, 40% said they found the transition worse than expected due to boredom, while 38% struggled with the lack of structure.

So, while it’s important to consider the financial side of retirement planning, you may need to prepare for the psychological aspects too.

Read on to learn about some common emotional challenges in retirement and how to overcome them.

A robust financial plan can prevent fears about being unprepared or retiring at the wrong time

Many people are apprehensive about retirement and whether they’re adequately prepared. For example, IFA Magazine reports that 48% of people are worried their savings will not last them through retirement.

This concern about being unprepared could lead you to second-guess whether now is the right time to retire. Fears about running out of money could also make it more difficult to enjoy life after work. This is because you might hold back on goals such as travelling because of the cost.

Fortunately, a robust financial plan could help you alleviate this anxiety. We can use cashflow planning to determine how much you’re likely to need to fund your dream lifestyle in retirement. This gives you a clear retirement savings goal to aim for.

When you reach this goal and decide to retire, you can do so with confidence, knowing that you have adequate savings.

Many retirees feel that they’ve lost their sense of identity

For many of us, our job is a big part of our identity. After all, we spend a significant portion of our lives working. That’s why it’s common for people to feel that they’ve lost their sense of identity when they retire.

This could leave you feeling as if you lack a sense of purpose in life, which can be very disheartening.

Fortunately, there are several ways to potentially overcome this. First, consider whether a “hard stop” retirement – transitioning from full-time work straight into retirement – is the right choice for you. You might decide that working part-time and retiring gradually is more suitable.

Bear in mind that if you do opt for a phased transition to retirement, you may face certain financial planning challenges. For example, you might flexibly access a defined contribution (DC) pension to supplement your income from part-time work. However, this could affect the level of tax-efficient pension contributions you can make in the future.

As such, you may want to seek professional advice so you can fully understand how a phased retirement might affect your finances.

If you do decide to retire fully, you may need to find a sense of purpose and identity from non-work-related activities. This looks different for everybody but finding new hobbies or spending time with friends and family could help.

You may benefit from creating a bucket list of activities you’ve always wanted to try. Ticking items off this list is a brilliant way to find direction in life and encourage yourself to keep pursuing new experiences.

Creating a financial plan and building a healthy retirement savings pot could mean that you’re more likely to be able to fund these bucket-list items.

Alternatively, you may decide to volunteer for a local cause. This is a popular option for retirees as it often helps people find that sense of purpose they are missing once they stop working. Additionally, it could benefit you if you struggle with a lack of structure in retirement.

More than 2 million people over the age of 75 in the UK live alone

Loneliness is perhaps one of the most significant challenges that you might face in retirement. Indeed, according to the NHS, more than 2 million people over the age of 75 in the UK live alone. Without an active social life, many retirees feel lonely.

This may happen because you form many of your social connections at work. As such, when you retire, you might lose a lot of your daily social interactions. Additionally, as you get older, you may face mobility issues that make it more challenging to get out and spend time with friends and family.

Unfortunately, loneliness can contribute to mental health issues such as depression and anxiety.

That’s why it’s important to maintain an active social life in retirement. You could achieve this by reaching out to friends and family or joining local clubs.

You may also benefit from support provided by charities such as Age UK as they offer several services to help you combat loneliness. For example, their phone helpline is always available if you want to chat to somebody. They may also help you improve your technology skills so you have more access to online communication and can easily find social events.

People often overlook the emotional challenges associated with retirement, and this can make the transition more difficult. Fortunately, if you prepare beforehand, you can overcome these emotional hurdles and enjoy your dream retirement.

Get in touch

We can’t remove the emotional challenges of retirement but we can help you with your financial plan, so you can focus on navigating this exciting new phase of life.

Please contact us at hello@ardentuk.com or call 01904 655 330. As an award-winning financial advice company with advisers included in the 2024 VouchedFor Top Rated guide, you can be sure that we’re a bona fide company providing excellent advice and high-quality service.

Please note

This article is for general information only and does not constitute advice. The information is aimed at retail clients only.

Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.

The Financial Conduct Authority does not regulate tax planning.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.