The “perfect” retirement can look different for everyone. Most people may agree, however, that not having to set an alarm or sit in traffic going to and from work every day is an enticing thought – and an important goal to achieve.
Yet, while you may be excited about stepping into retirement or having already done so, one key disappointment for many people is missing those they used to work with, along with the friendship and camaraderie of their colleagues.
In fact, for many retirees, the life they envisioned living after leaving the workforce turns out to be quite different than what is actually experienced. This is due in large part to the loneliness of going from days that are filled with communication and teamwork to extreme quiet and isolation at home.
This can become even more challenging if a retiree lives alone or is far away from family members. Even so, being married or having a partner at home still won’t necessarily “cure” all of the loneliness that is felt once someone leaves the hustle and bustle of the workforce.
But the good news is that, similar to planning ahead financially, you can also develop or expand upon a purpose that, in turn, can allow you to live a fun, exciting and meaningful retirement lifestyle.
While many people look forward to the days when they can kick back, sleep in and possess the freedom to do whatever they would like with their time, an unstructured lifestyle in retirement can also present some unexpected challenges.
Many people can also experience social isolation, loneliness and even depression after leaving the workforce. One reason for this could be the inability to shift out of “work mode” and relax. This is particularly the case for those who formerly held roles as company leaders and business owners.
When someone is no longer in the routine of going to work, eating lunch with co-workers and taking part in other social events that are connected to their career, they may start to feel that some of their most enjoyable – and closest – relationships have come to an end after they’ve retired.
Often, people see themselves as an extension of their career or work “roles.” So, no longer being a doctor or a teacher can feel like completely losing their identity. Further, it can be difficult to fill days with meaningful activities – and in some cases, this can even lead to anxiety due to having “too much time on your hands.”
In addition, it is easy to feel isolated without the regular, day-to-day interaction that you had with co-workers. In many instances, work colleagues become like family and co-workers share in-depth details about their lives.
So, if you loved (or love) your job and found it truly gratifying, it is possible that you built a significant portion of your social life around it and the people involved. Because of that, retiring can present you with a number of complex challenges.
Added to that can be the increased likelihood that you may experience health-related issues, which in turn, could result in mobility and/or transportation struggles and hinder your ability to socialize with others even more.
This cycle can actually become a vicious circle. For instance, one study found that retiring led to an increase in difficulty related to mobility-based activities, as well as an increase in health conditions, and in turn, to a decline in mental health.
With that in mind, even though retiring may feel like a long-awaited vacation – especially after many years of working – it can also become a catalyst for physical, mental, social and emotional decline. So, it is important for you to plan ahead – not only for the financial aspects of retirement, but also for the social ones, too.
Regardless of whether you are preparing for retirement or you have already reached this long-awaited milestone, it is vital that you take the necessary steps for recognizing and combating the feelings of isolation and loneliness.
As you approach retirement, it is important to ask yourself how you might wish to spend your time in the future. While this can certainly be a tough question – and possibly even one that pushes you to dig deeper within yourself to discover the types of activities and/or relationships that could help with filling the void that your workplace used to offer – it is critical for finding meaning in the next stage of your life.
Some of the best ways to help with overcoming loneliness and time without your “work family” going forward can include doing one or more of the following:
One great way to meet other people who have similar interests is by joining a club or organization. These groups can have a focus on anything from gardening to hiking to motorcycle riding to backpacking across the country. So by joining various clubs or organizations, not only can you instantly be part of the activities that they offer, but you can also share your passion with other like-minded individuals.
Unlike just a few decades ago, today’s retirees have the internet now, which can quickly and easily allow you to narrow down groups, clubs and activities so you can interact with others, either locally or around the globe. Websites like Meetup.com and AARP.org can be particularly helpful in this area.
If there is a charity that is close to your heart, retirement can allow you to spend more time volunteering for the good of the organization. In addition to connecting with others in this area, doing this can give you a sense of accomplishment while at the same time doing good.
A study conducted by the Center for National and Community Service found that roughly 70% of retirees who were prone to depression experienced fewer symptoms one year after they started volunteering.
With that in mind, consider which charity or charities you would like to support, as well as how any donations that you give could factor into your overall financial plan in retirement. It could also be worth considering an ideal balance between offering financial support and contributing to the charitable organization(s) with your time and your service.
Another way to make your body and mind feel better is by exercising on a regular basis. Not only has exercise been found to be beneficial physically, but it is also essential for the mind and the soul. Studies have shown that an active lifestyle can decrease the feelings of loneliness and depression in retirees – and it can also help with managing feelings of stress and anxiety.
Many people have hobbies throughout their lifetimes. These could include using their talents like painting or creative writing, or simply spending time doing something that they enjoy, such as collecting stamps or fixing electronic gadgets.
Finding others who also share these same hobbies can lead you to new friendships, too. In addition, depending on your hobbies of choice – such as arts and crafts or auto repair – it may even be possible to earn some additional income by taking it a step further and selling your products or services to others.
If you’ve set aside a “wish list” to accomplish “someday,” retirement could allow you the time to move forward with it. Some examples here could include:
In addition to simply achieving these goals, doing so could provide you with yet another opportunity to team up with other individuals who are also on the same or similar mission.
Studies have shown that retiring from the workplace can lead to a decline in cognitive functioning. Therefore, it is essential that you find ways each and every day to stimulate your mind, solve problems, and master new skills.
Regardless of your age or previous accomplishments, you can never learn “too much.” Retirement can allow you to focus on learning new knowledge and skills. For instance, do you want to learn how to build a website? If so, take a course at a local community college or online. Do you want to learn more about cooking? There are lots of opportunities to do so.
On top of acquiring more knowledge, both classroom and virtual learning can allow you to interact with others – both students and instructors – in order to ask questions and/or collaborate on projects together.
Another potential avenue for learning is to join a book club. You can open yourself up to new ideas and reading materials. Becoming a book club member can also provide an avenue for meeting new people and discussing literature over a cup of coffee.
Although it might sound counterintuitive, retirement can be an ideal time to start a new business or embark on a different career. Many retirees take on new business-related endeavors after they have left the world of traditional employment.
If you don’t want to take the leap of starting a brand-new company or business, but you are feeling isolated and you miss the social interaction that comes with going to work every day, you could instead take on a part-time job. Going this route can provide you with an opportunity to leave the house and interact with others, while also finding a nice balance between work and play.
Becoming a mentor to students, new business owners or others that you can help can have a powerful impact on both you and the individuals you are assisting. Doing so can provide a way for you to share life lessons and experiences that you have had over time.
Many mentors state that taking someone under their wing during retirement has done wonders for their self-esteem. It has also helped retirees increase their own productivity and has even helped them learn something new about themselves.
The world is a big and fascinating place that is just waiting to be explored – especially after many travel avenues have been re-opened following the COVID-19 pandemic. This includes both national and international travel options. And, if you don’t want to go it alone, there are numerous travel clubs for retirees who want to share adventures together.
One of the best ways to fight loneliness and social isolation in retirement is to establish or expand upon a purpose. Finding meaning in retirement can often involve going beyond yourself, contributing to the broader community, serving society and taking care of others. It can also help you to connect with – and to show compassion – toward others.
If you’re still unsure of exactly what your passion is, you can ask yourself what activity or accomplishment would get you out of bed in the morning or what would inspire you to reach your highest potential.
In order to help you with narrowing down your purpose even further, you could answer the following questions:
Finding meaning and purpose in retirement can be a journey of sorts. In your life’s earlier days, the “pieces” often fall into a predictable pattern, such as graduating from high school, graduating from college, getting your first job, getting married, buying your first home and starting a family.
But once you step out of the working world and into retirement, things are different – with one of the biggest sources of discomfort and stress stemming from feeling “disconnected” from other people.
That is why participating in social activities with other retirees can be a great way to find meaning and purpose going forward. In fact, your retirement lifestyle should ideally include a mixture of activities that keep you physically and socially active and engaged.
One of the other biggest keys to a successful retirement is having one or more regular streams of income that you can count on – regardless of what happens in the stock market or with interest rates – for the remainder of your lifetime, no matter how long that may be.
With a steady and reliable income “floor” that arrives like clockwork, you can focus on other, more meaningful aspects of your life, like spending time with loved ones, volunteering at a favorite charity or diving into a new hobby like writing, while at the same time knowing that you can pay your living expenses.
One way to achieve your retirement income goals is by setting up an annuity. Most annuities provide several different options for receiving an ongoing income. These usually include the following:
If you choose the period certain annuity income option, you will receive payouts for a pre-set period of time, such as 10 or 20 years. Once this time period has elapsed, the payments will stop. However, if you pass away before the end of the time period, a beneficiary can continue to receive the remainder of the payments.
With the life-only option, income from the annuity will continue to come in for the remainder of your lifetime – regardless of how long that may be. Going this route can help you to alleviate the risk of running out of income while you still need it.
Some annuities offer a joint life income option where payments continue until the death of a second individual. (After the first person passes away, the dollar amount of the payments may be reduced or stay the same.)
Alternatively, if you choose the life with period certain annuity income option, payments will keep flowing in for the rest of your life. However, if you pass away before a set time period, such as 10 or 20 years, the income will continue to be paid to a named beneficiary.
Having several different payout options to choose from with an annuity can allow you to more closely “customize” your retirement income to meet your particular financial needs and objectives.
In addition to the frequency and time frame, the payment start date can differ from one annuity to another, as well. Therefore, annuities can be categorized as being either immediate or deferred.
With an immediate annuity, you typically contribute one single lump sum of money. These funds may come from your personal savings and investments, or via a rollover from your retirement accounts, such as an individual retirement account (IRA) and employer-sponsored account like a 401(k) plan. Once an immediate annuity has been funded, the income can begin right away (typically within the following 12 months).
On the other hand, deferred annuities do not start to pay income until a time in the future (if ever). These types of annuities have two distinct “phases.” These are the accumulation phase and the income, or payout, phase.
During the accumulation phase, the funds that are in the annuity grow on a tax-deferred basis. This means that there is no tax due on the gain in the account each year. Rather, taxes are paid at the time of withdrawal. Therefore, because you may not access this money for quite some time, the annuity’s account value has the ability to grow and compound exponentially.
There are different alternatives for how annuities generate their returns, too. For example, annuities can be categorized as:
Fixed annuities offer a pre-set rate of return that is determined by the offering insurance company. While this rate can typically be somewhat low (usually on par with CDs or other fixed-income financial vehicles), the “tradeoff” is that principal is protected in any type of market or economic environment.
There may also be other features associated with a fixed annuity, such as a death benefit and penalty-free access to the funds in the account if the annuitant is diagnosed with a terminal or chronic illness, or if they have to reside in a nursing home.
Fixed annuities are often purchased by retirees, as well as those who are approaching this time in their lives. This is due in large part to their guarantees, as well as the financial security that they can provide.
Fixed index annuities are a type of fixed annuity. The difference comes in the way that their return is calculated. With fixed index annuities, the return is based on the performance of one or more market indexes, such as the S&P 500.
In time periods where the index’s performance is good, a positive return is generated by the annuity, often up to a pre-set limit, or “cap.” If, however, the underlying index incurs a loss in a given time period, the annuity does not lose value. Rather, it is usually credited with a guaranteed “floor” rate.
Fixed index annuities are sometimes deemed as offering the “best of all worlds.” This is because they can produce higher gains that regular fixed annuities, but without the risk of market-related losses.
The return on a variable annuity is determined in large part by the performance of underlying equities, like mutual funds. In this case, while there is an opportunity to generate a high positive return, there is also the risk of loss – including the loss of your original principal.
Variable annuities are also known for their high fees which, in turn, can further reduce the return. Some of the most common fees that you will find on a variable annuity include:
Many annuities offer the opportunity to add additional features – either at no cost or for an added amount of premium. These could include:
While annuities can provide you with a long list of financial and income-related benefits, though, not all annuities are the same. So, it is critical that you know which type of annuity – if any – could best fit with your specific needs and objectives.
Some of the items to consider when you are deciding whether or not an annuity is right for you include the following:
Because there are many items to keep in mind when choosing an annuity, it is best to first consult with a financial professional who can help you determine where your incoming cash flow sources are, and where any income gaps may be.
From there, they can assist you with implementing the proper tools for filling these gaps so that you can better anticipate where your retirement income is being generated and when you can expect it to arrive.
While most people look forward to having more free time to enjoy life, no one wants to feel isolated or lonely in retirement. Therefore, it is essential that you incorporate purpose into your overall retirement planning.
Likewise, keeping important social relationships alive during a more unstructured phase of your lifetime can present some challenges of its own – and it often takes a combination of proactive scheduling and internal motivation to carve out the time and the energy that is needed. But, it can certainly be done.
Alliance America is an insurance and financial services company dedicated to the art of personal financial planning. Our financial professionals can assist you in maximizing your retirement resources and achieving your future goals. We have access to an array of products and services, all focused on helping you enjoy the retirement lifestyle you want and deserve. You can request a no-cost, no-obligation consultation by calling (833) 219-6884 today.