How to Prepare Emotionally for Retirement

Andrew Weber is a senior director of Planning Philosophy, Research and Guidance at Northwestern Mutual.

For years, you’ve worked to save a portion of your income to prepare for retirement. Now that you’re approaching this phase of life, you’re finally ready to live the life you’ve been saving for. Or are you?

Transitioning from saving to spending can be one of the biggest psychological challenges many retirees face. If you feel anxious about spending down what took you a lifetime to build, you’re not alone. Moving from a saving to a spending mindset can be stressful. That’s because great savers are conditioned to delay instant gratification.

For some, worry and even fear may play a role. The unknown—including uncertainty about how long you’ll live, future economic swings and health care changes—can leave you feeling like you’re never truly prepared, even if you are.

But if you’ve worked hard to build a retirement plan that has accounted for retirement risks, you don’t need to feel guilty about enjoying your new life. Taking the time to envision how your dream retirement would look is a great way to start. But if you’re still concerned about changing your mindset from working/saving to retiring/spending, there are several things you can do to ease the transition, enjoy more and stress less.

Build your budget

If you’re a good saver, you probably aren’t an impulse spender. That’s where a budget can help. A budget is often viewed as restricting your spending, when in fact it’s the opposite: It shows you how much you can comfortably spend without having to worry about other goals being affected.

So look at your budget as one of the tools you can use to explore your interests and accomplish the things that are important to you. Budgeting can help you control nagging worries and make educated choices about what you spend your money on.

Expand your community and give back

Even if you didn’t always enjoy your job, work likely wasn’t just about earning an income. It was a part of your community and gave you an identity that’s suddenly gone. This can often lead to feelings of isolation. You may want to consider seeking out retired peers for advice on how they made a successful transition. Then build your community by plugging yourself into local groups or clubs (pickleball, anyone?) or signing up to volunteer or mentor.

Broaden your social connections

Spending more time with your family may have topped your list of expected retirement activities—especially if you have grandchildren. But it’s important to set expectations on how much (or little) time you want to spend with them. Some kids may start to expect their retired grandparents be a childcare replacement. But a study published by SSRN (Social Science Research Network) suggests that leisure spending, health status, and spousal and friend relationships have the greatest impact on creating life satisfaction during retirement—while other types of spending and relationships with children do not. So it’s important to find the right balance for yourself—and your family.

Find the passions you want to pursue

Now that you have the time (and the money) to spend doing other things, get out there and do them! Research has shown that spending on experiences brings more happiness than buying material goods. Find activities that bring you joy, whether that’s learning a new language or musical instrument, traveling, volunteering or exploring your creative or adventurous side. If you’re busy doing something you love, you’ll spend less time worrying and more time enjoying yourself.

Schedule periodic check-ins with your financial advisor

Checking in with your Northwestern Mutual financial advisor periodically can help ease concerns over whether you’re spending too much. An advisor can help you course correct within your retirement plan if something unexpected occurs and you’re afraid it will upend your finances. Or, if you have a new goal or adventure in mind, they can also help you figure out if you can afford it or help strategize ways to help make it happen.

We plan for retirement, but we don’t always plan for how to live in it. The ability to comfortably spend in retirement comes down to confidence. Having a plan will ultimately help you feel more confident that you’ll have to the income you need to live the retirement you want and enjoy the fruits of your labor.

CFP disclosure: Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER® and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.