How Your Money Mentality Should Change in Retirement

Finally, you’ve reached retirement. You’re crossing the finish line of a marathon that’s lasted 30, 40, or even 50 years. For many of us, the image of retirement is endless vacation days, no alarm clocks, and nonstop relaxation. 

Although the rest and relaxation part is accurate, the truth is that retirement really throws a wrench in how we view our money, and the switch from receiving structured, employment-driven income to drawing down investment accounts can be harder than we realize. 

If you’re retired or nearing retirement, most likely you’ve worked long enough to witness the transformation of an economy that, nowadays, looks very different. Factors like offshore workforces and manufacturing, corporate acquisitions, and the transition from a manufacturing-based economy to one centered around service, information and technology has fundamentally changed the dynamics of employment. 

As a worker, you have had to adjust your financial mentality and approach to roll with the changes to the economy and your own individual position.

With some exceptions in the public sector and, even more rarely, private business, defined benefit plans, like pensions, have gone the way of the dinosaur. This means the burden of saving for retirement has shifted onto you. 

And just as your money mentality has changed over the course of your career, so too should it change when you retire. 

Changing Your Money Mentality in Retirement

You used to ask yourself if you were saving enough money for retirement. Now you’ll need to ask how long you and your partner require that money to last.

You used to set retirement savings goals. Now your savings have shifted in purpose, and you need to instead set budget goals that make sense for your lifestyle. 

You used to optimize your portfolio to reflect your growth needs and risk capacity. Now that you’re retired, you may look at dips in the market and other risks in an entirely different way.

You (probably) used to work full-time for your primary source of income. Now, luckily, you have a lot more flexibility with your time and choice in how you spend each hour of the day. Do you want to work part-time? Consult? Or do you simply want to pursue a retirement career that reflects one of your passions? 

Retirement Mindset Means More Than Just Money

When you think about it, suddenly moving from working 40 hours a week to zero can be a real shock to your system. Although it may sound great in theory, the truth is that we’re creatures of habit—and we don’t always react well to sudden, drastic changes. 

Some employers will allow you to ease into retirement by gradually shortening your work week over a year or a couple of years. This can be a great way to get adjusted before diving fully into retirement when the time comes. 

Use your days off to discover new hobbies, start volunteering, meet with friends and begin developing a new routine you can expand on in retirement.

If your current place of employment does not offer a gradual retirement option, you could search for a part-time job, perhaps something that’s more laid back or of interest to you. Easing into retirement not only helps reduce the shock but also can be a great way to continue earning income without committing to a full work week. 

Everybody Needs a Helping Hand Sometimes

If you’re struggling with your money mentality, there are things you can do to help. For many, this starts with making sure that their mindset and daily habits are aligned with their passions—friends, family, travel, hobbies, volunteering and so much more. 

Some find it helpful to discover role models, people like them who are wonderful examples of thriving in retirement. 

And everyone, along with the above actions, can seek help and counsel from their financial professional to set and meet their retirement goals.

This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.