How to prepare emotionally for financial independence in retirement


In recent months, you’ll have read several articles on the topic of goals-based financial planning in our newsletters.

These discussed the importance of not mistaking your financial objectives for your financial goals, and how achieving clarity as an expat has its specific challenges.

Of course, for us, the reason for all of this is so that we can help our clients to develop and implement a strategy that will mean they are financially prepared for retirement.

However, it might be all well and good being financially prepared for retirement, but all too often there is a gaping hole in people’s psychological preparation for when they are no longer working. For example, I love playing golf, but there’s only so much of it I think I can tolerate in a retirement that could last 30 years!

To look more closely at the psychology of retirement, I asked Tamsyn Rippon for her thoughts. She is a trained counsellor based in Hong Kong, so I think you’ll find her views both engaging and topical.

Happiness at work does not automatically mean a happy retirement

Retirement can signal the end of years of stress and sacrifice. Although trends are changing, most middle-aged people look forward to retiring in their 60s.

In general, for those with good health and financial resources, life beyond the office does lead to greater happiness. According to the Office for National Statistics, retirees in the UK are happier than the general population.

However, it is important to note that this is a generalised statistic and the reality for individuals can often be very different. For example, a study published by the University of Alberta found that there are many factors that can be strong predictors of wellbeing in retirement. These include:

  • Your personal self-esteem
  • Feelings of personal competence and control
  • A supportive family and friends
  • Participating in community activities.

But for many high-powered workers, it is their job, not their leisure time that provides this.

Without their position, some may start to question their status in society and suffer a sense of loss and grief for the identity, structure, and purpose their job once offered.

You should be planning ahead to manage the emotional impact of retirement

As with all major transitions, retirement can be a rude awakening to the choices we have made and how they have affected various aspects of our lives. So, it is not to be taken lightly.

Research carried out at the University of Gothenburg and published by Hogrefe suggests that the choices you make early in this process could have long standing effects on your physical and mental wellbeing further down the line.

People can be creatures of habit, and this is especially true as we age. So, the choices you make now are likely to affect you for many years to come.

Instead of waiting for retirement, it might instead be wise to use the prospect of it as an opportunity to explore your current goals and values. You can do this by:

  1. Listing the ways in which your job brings value to your life. Consider things like status, financial freedom, structure, a sense of identity, inspiration, excitement, and so on.
  2. Then, on a scale of 1 to 10, rate the value you attach to each part of the list.

This should give you a good overview of what you value and what you should look to prioritise in your planning for retirement.

Look for the same challenges in retirement as you have in your working life

If your sense of identity is largely defined by your job, consider which elements specifically contribute to your sense of self.

For example, if, as a doctor, you enjoy the intellectual as well as the caring aspect of your work, volunteering for research organisations that could benefit from your knowledge while you keep abreast of new developments in the field, could be mutually rewarding.

Alternatively, if you’re a business leader and enjoy spearheading initiatives, you could consider partnering with, or starting, a small business that indulges your passion without the pressure of larger budgets and expectations.

The list you have created might also highlight gaps you would like to fill once you have more free time and feel less encumbered by societal expectations. After decades working in a high-pressure financial environment, you might want to explore your more creative side or indulge in sports that you hitherto neglected because of a lack of time.

Intentionally noting that which you hope to achieve and then planning for ways in which you might achieve it can help you feel more purposeful, even before you retire.

You should also re-evaluate your relationship structures

In addition to a sense of purpose, identity, and structure, our jobs also provide the context and framework for our relationships.

Time constraints might limit the extent to which we can develop friendships outside of work. You might have moved from one continent to another to enjoy promotion far from home. So, long-term friendships and relationships with family members might have fallen to the wayside.

Although some may hope that retirement will offer them the opportunity to deepen these relationships, more time with loved ones can actually bring its own set of challenges.

Instead of grabbing minutes between work, socialising, and parenting, facing days of endless time together can be difficult, especially if roles within the home suddenly shift. In addition to this, some retirees may see their children leave for college or university just as they retire, meaning they have less rather than more time to spend with them.

Again, planning for this adjustment is important. These four steps can help you manage this:

  1. List the important relationships that already exist in your life.
  2. Rate on a scale of 1 to 5 how rewarding these relationships are to you.
  3. Consider what it is about these relationships that you find fulfilling and what might still be missing.
  4. Think about ways in which you might deepen these relationships or perhaps initiate new ones.

A clearer map of what you already have and what you want for the future will help you feel more in control and purposeful right now. It can give you the motivation you need to make the small, incremental changes necessary to improve the quality of your relationships with your family and friends, and with yourself, before you are overwhelmed by great change.

Enjoy the opportunity and embrace what could be the best years of your life.

Get in touch

Tamsyn’s website provides you with more information about the counselling services she provides, and details of how to make an appointment to see her.

If you would like to talk about your own plans for retirement please contact us by email or, if you prefer to speak to us, you can reach us in the UK on +44 (0) 208 0044900 or in Hong Kong on +852 39039004.

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