MOST PEOPLE CAN’T WAIT TO RETIRE!
Pre-retirees reach a retirement “Number” representing the amount of money needed to retire. A day, month, or year on a calendar is circled to represent some future planned retirement date. Planning begins for retirement trips. Excitement builds!
But, when the actual retirement date approaches people hesitate. Why?
ONE WORD- FEAR!
When faced with a dangerous or potentially life-threatening situation the body initiates a “fight or flight” response. This is a self-preservation function that is a carryover from earlier developmental stages of humanity. When faced with a potentially harmful or deadly situation there’s a choice to stand and fight; or flee.
Part of the response includes a split second of hesitation in which the brain critically analyzes the present situation and makes the decision that will seem the best to preserve life.
The retirement planning process produces similar though non life-threatening situations that do not require a ”fight or flight“ response, but can and do cause hesitation due to the inability to make a decision. In “fight or flight” situations hesitation can be fatal. In retirement planning hesitation is normally not fatal, just harmful and counterproductive.
Common in retirement planning are situations where the path forward is not immediately obvious and hesitation occurs. Unlike the momentary hesitation before the “fight or flight” decision is made, these times of hesitation can be prolonged and damaging.
More simply termed: PARALYSIS BY ANALYSIS
Paralysis is created by fear of the unknown, which creates more paralysis, which creates more fear of the unknown. The vicious circle can continue for long periods without any observable resolution and overwhelm the unprepared.
There is a concept called the CONCEPT OF ENOUGH (See post #1- FOUNDATIONS OF RETIREMENT: THE THREE-LEGGED STOOL) and I believe that before anyone can become comfortable with the prospect of retirement that three questions must be addressed:
The three questions are:
-Do I have ENOUGH money?
-Have I worked ENOUGH?
-Will I have ENOUGH to do in retirement?
Or, if stated differently:
-Do I have enough money to retire happily?
-Have I worked enough to retire happily?
-Will I have enough to do in retirement to retire happily?
The financial side of retirement planning can be adversely impacted by a person fearful of not being financially independent (Do I have enough money?)
Even people who are sure that they are financially able to retire may not be able to quit working due to fear of the unknown. This translates into the O.M.Y. (one more year) syndrome. People will continue to work year after year reasoning that one more year of work will increase financial security by increasing net worth, Social Security payout, or work-related retirement benefits. Although; all of these things may be true, they may also be unnecessary if this particular person is truly financially able to retire. it relates to answering the question: How much is enough?
The work or mindful side of retirement planning may uncover a fear that retiring is not most beneficial from a work standpoint.
“Have I worked enough?” has different meanings for different people. It is not uncommon for people to state: “I love my work and I am never going to quit.”
In addition to financial compensation, work provides validation, social status, structure, a consistent routine, and social interaction. In many cases, it also provides mental and physical stimulation, something to do every day, and something to fill the available hours of each day.
When a person retires they not only lose work-related compensation, but also a sense of fulfillment and social status. This creates fear and anxiety in the decision-making process due to the potential loss of these work-related benefits, loss of social standing, and loss of professional identity.
A Social Security Administration study called “Links between early retirement and mortality“ written by Hillary Waldron correlates higher death rates with early retirement. (providing another reason to continue working.)
Fear is generated in the purpose or “Will I have enough to do in retirement“ mindset because people are unsure of how each retirement day will be filled.
With the loss of work comes the loss of schedule, regimentation, and loss of daily structure. People are unsure about what their purpose will be after retirement or how purpose can be re-established.
Upon retiring some people realize that they have no hobbies or pursuits, and have not seriously thought about what meaningful things; if any, they want to accomplish.
Where does that leave the pre-retiree? There are several options available:
*Continue to work until it is no longer possible. (remember that death is a form of forced retirement!)
*Adequately plan for retirement while considering finances (do I have enough money?), mindset (Have I worked enough?), and purpose (Will I have enough to do in retirement?)
Making the decision to retire is stressful even under the best circumstances, even with adequate and proper planning. But, adequate and proper planning will reduce the Paralysis by Analysis and allow a person to face retirement fears and move forward with confidence. Proper retirement planning not only considers net worth, retirement budgets, and retirement spending but also considers part-time retirement work (whether compensated or uncompensated), hobbies, and purpose in retirement.
Once the financial side of retirement is resolved 90% of retirement will revolve around purpose in retirement. It is worth dwelling on that thought for a minute or two!
Does adequate retirement planning resolve and erase fear?
The short answer is NO, it does not!
Prepared or unprepared, everyone will be faced with the prospect of retirement at some point in life.
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