A psychologist on how to know you’re ready for retirement
I’ve spent the past 17 years researching the psychology of retirement and here are nine things to ponder as you plan for the next stage.
People who have enjoyed highly rewarding and fulfilling careers often struggle with when to retire.
They might feel they have enough money but wonder whether they'll be bored, unchallenged or irrelevant.
Thinking about when to leave, how important work is for you, what makes you happy and how you will spend your time are important considerations.
I’ve spent the past 17 years researching the psychology of retirement and here are nine things to ponder as you plan for the next stage.
Thinking about when to leave, how important work is for you, what makes you happy and how you will spend your time are important considerations. Simon Letch
1. Six buckets
My research team and I suggest thinking about retirement in six buckets: physical (anything that keeps you mobile); financial (keeping track of finances); social (spending time with people); emotional (keeping emotions in check and positive); cognitive (learning new things and keeping active) and motivational (looking to the future and setting goals).
2. Work hard on your health
When we consult the latest edition of the ABS Retirement Intentions survey (2022-23), about a third of people will retire because they can access their super or pensions.
Others may be forced out by ill-health (13 per cent) and another 5 per cent will be retrenched, dismissed or have no work available.
The lesson here? Keep yourself well so you can retire when you want, and anticipate change where you can so you have your ducks lined up in case things don’t go as well as you planned.
One way to avoid deciding about when to retire is to let your health make the decision for you.
Health is something that probably cannot wait. Many people tell me they plan to eat better, relax more and exercise in retirement.
Are there some lifestyle changes you can make now to maximise your choices later and avoid being one of the 13 per cent leaving due to ill-health?
3. Aim to leave on your own terms
Two studies I’ve conducted with different samples over the past 17 years point to the fact that being forced out of work unexpectedly from ill-health or redundancy may make it more difficult to adjust to retirement.
Another Australian-based meta-analysis (a meta-analysis is the examination of data from a number of independent studies of the same subject to determine an overall trend) lists workplace exit conditions in the top five factors predicting life satisfaction at older age. Recognising the impact of work on your health should not be ignored.
4. Don’t assume staying at work as long as possible is right for you
Some insurers report mental health claims outstripping those of other illnesses (including cancer) so carrying on regardless when work is taking a toll might not necessarily be the best option.
Staying on and dying at your desk might not be your only career path. Think about ways to scale back if you need to – move to part-time, start succession planning and consider ways to strategically exit key projects or clients.
It is true that sometimes people get the timing wrong and try to get back to work after running out of money or getting bored, but this might be avoided with: a) a realistic assessment of what works means to you; b) a considered decision about when to leave; c) reflecting on how you will spend your time in retirement; and d) determining if will you have enough money before you leave work.
5. Fear of being bored is probably unfounded
With the abolishment of compulsory retirement age for all but a handful of occupations there is no deadline to leave work.
While it is true that some people find it difficult to adjust to life after work, in the main people adjust well and get happier over time.
Of course, if you are enjoying your work there is no need to retire unless you feel the time is right for you, or you are physically or cognitively compromised. The latter happens far less frequently than you might imagine.
In the main, concerns about being bored in retirement can be avoided and may be unfounded. Years ago I had a theory retirement would be a disaster for people highly invested in their careers. Guess what? I did not find what I was looking for. (That’s not to say it is not true, just that I could not find a relationship.)
What I did find was a lot of busy people transferring that work energy into other activities in retirement. Those who strongly identified with their work were no more or less adjusted to retirement than those who did not enjoy their work.
But it’s worth thinking about how you will spend your time. We estimate you will have 62 hours a week available to you when you retire. Thinking ahead to how you will spend that time can help identify some gaps you may not have considered.
Plan to go to the gym every day? Really? Every day? Maybe try it now – just once. But say you go to the gym 1.5 hours a day for five days a week, that’s 7.5 hours out of the 62 accounted for – only 54.5 hours to go.
Perhaps go for a few sessions before you retire so that you can figure out if it’s for you. You might love it or find that a boot camp, Pilates, walking or pickleball is more your thing.
6. Understand the role of ‘work centrality’
Years later, as I was investigating the careers of doctors, my team did find something interesting. Doctors were delaying retirement because of something known as work centrality (ie, how central work was to their identity).
This idea of dedication to career can start as soon as a person steps into training or their first role. I once worked with a medical student reviewing videos of doctors transitioning into retirement. He confessed he had done very little socially, sporting or extracurricular since he started his medical training.
Would you expect him to pick up the badminton bat or guitar again at 70? When you’ve been the expert in the room for the last 45 years it might be harder than expected to play the role of a newbie.
7. Practise the transition
Our research found only about 21 per cent of people who say they will take up new activities in retirement actually do so.
We also found the Creative Doctors Network, which involved a lot of doctors (some partially retired and others still working) who were doing interesting things – writing, poetry, bagpipe-playing, magic tricks, acting. Some had wound their practices down to part-time. Some had specialised in areas that they enjoyed. Others designed succession plans, so they became mentors.
Sadly, the Creative Doctors Network is no more. But it does illustrate the possibilities of investing in yourself while you are still working to make the transition easier.
The message here is to start easing yourself into networks and activities you plan to enjoy into retirement. Plan to play golf every week? Go four times a year now. Want to change gears and build a niche business? Start networking with your new colleagues and client base. Want to live off-grid in a hut on a hill? Book an Airbnb for a weekend/week/month. You get the idea.
8. It need not be an all-or-nothing affair
Our latest research of a national sample in a randomised control trial intervention is that when you combine career, health and financialsyou get a better result than just considering financial information alone.
Asking yourself, why do I want to leave? Is it my work I’m leaving? Or the organisation? Or my boss? If it’s the latter two, you might want to explore other options, such as becoming your own boss or finding another organisation better aligned to your values.
You may not need to leave it all behind immediately. Perhaps you could select and continue elements of your work, or work with a smaller group of select clients or projects. Could you specialise in some of the technical aspects of the same role?
Look around to find examples of flexible career paths – the lawyer who manages fewer long-term relationships, the academic who focuses on writing, the CEO who coaches successors.
9. The social stuff is really important
A more recent meta-analysis from the UK suggests that predictors of life satisfaction in older age are more related to physical capability and social support rather than a lack of work-related purpose.
Our own research prioritises wealth, health and social connections as predictors of retirement adjustment. And a meta analysis at the University of Queensland also reinforces social participation and physical health.
So rather than focusing on all those meetings and emails you will be missing, maybe it’s time to get invested in striving for good health and strategies for meeting new people.
Ask yourself, who is your new tribe? Other key questions are, who will you turn to when things get a bit tough, and what’s going to keep your brain active? The answers might be playing bridge, visiting a gallery or learning how to use that fancy camera you bought that’s stuffed in the back of the cupboard.
Start getting into the habit of setting those goals now. Not only will it help you get started, but it will pay dividends in promoting better retirement adjustment when you do retire.
