Your First Year of Retirement: 5 Things to Expect


Believe it or not, the first year of retirement can be a stressful one. With so much time spent planning and saving, it’s easy to see our retirement date as a finish line rather than the start of a new phase of life. It can surprise even the most prepared retiree. Here are 5 things to expect during your first year of retirement.

1. Retirement Won’t Feel Like Vacation

Granted, you may need a well-deserved vacation soon after you stop working. However, the novelty of retirement wears off sooner than most people expect. Even as soon as a month or two after retirement, you may begin to feel anxious and begin seeking fulfilling activities to occupy your free time.

The moments sold to us in retirement TV commercials simply cannot happen ad infinitum. At some point, life will reach a steady state. You’ll still have to buy groceries, take out the trash, and run the dishwasher. You may wonder how you were ever able to do all of this while you were working a full-time job.

In fact, I once saw a new retiree struggle with these feelings less than two weeks after retiring! Therefore, it’s important to start thinking about what life looks like during retirement while you’re planning for it. It’s best to prepare in advance for the mental challenges of such a life-changing event.

2. It May Put Stress on Your Relationship with Your Spouse

After a career spent going into the office, suddenly spending all day, every day with one another can be a stressful change for both partners in any relationship. This can be particularly acute if one partner is a career-driven, Type-A personality.

I once worked with a high-level executive who, after retiring, fell into his default mode of “managing” at home, just as he was accustomed to at work. Obviously, this didn’t go over well with his spouse, who had expertly managed their household for decades.

“I am the CEO of the house,” she told him.

While it’s a funny story now, at the time there was some question whether their marriage would survive. Fortunately, they got help, which eventually deepened their relationship.

If you’re still planning for retirement, I recommend that you include your spouse if you haven’t already. You may find that their expectations of retirement are surprisingly different than what you may have believed. You may also need to renegotiate some of the household chores now that one (or both) of you will have more free time. Of course, this is all part of being in a healthy relationship; communication is key.

Chances are, if your relationship survived the Covid lockdowns, the stress of the first year of retirement may not be as acute had you retired pre-pandemic. Many of us experienced what it was like to spend every waking moment with our partners! If your relationship survived 2020, things just might work out.

3. You May Struggle with Your Identity

For many people, the first year of retirement initiates a change in how they see themselves – and how the world sees them. After all, so many of us identify ourselves by our professions or careers. Fairly or unfairly, “What do you do?” tends to be the most common question we receive when we meet someone for the first time.

Our work is part of our identity. After we let go of work, that identity begins to change.

You may find that the business networking connections you’ve created over the years slow down. It can hurt to think that the business world you’ve inhabited for so long has moved on without you so quickly. It can have a deleterious effect on how we perceive our value.

If you’ve worked in a team environment, you may miss the camaraderie of interacting with others in working toward a common goal. It can be extremely rewarding to be part of a team. If you’ve spent years enjoying the excitement of those types of interactions, there’s a good chance you could feel lost during that first year of retirement.

If you feel this could be an issue for you, I recommend that you start getting involved with a passion project before you retire. This could ease the transition away from work and begin forging new social connections. Of course, this isn’t something that everyone struggles with. Some people can leave work and never look back.

4. You May Feel Lonely

Beyond tying our identity to our careers, it’s hard to understate the positive value of our relationships at work and in our professional communities. We often take the numerous and rich social interactions we experience in a work setting for granted. Losing these day-to-day interactions after retirement can leave a void in our social world that’s difficult to replace immediately. This social vacuum created during our first year of retirement can create immense feelings of loneliness.

For many, the first year of retirement may mean downsizing to a new house – or even moving to a new city. This could potentially bring up the stressful scenario of meeting new people and making new friends. After years of forging strong relationships, it can be lonely and stressful to be without them during the first year of retirement.

5. The Financial Planning Doesn’t End

Though your retirement may feel like the finish line, there’s still much planning required to ensure you stay retired. You’ll need to adjust to living on your investments during your first year of retirement. How much do you withdraw each month and from where?

In addition, there will always be one-time expenses that you’ll need to plan for. These might include replacing the roof, buying a new car, helping a child purchase a first home, or taking a once-in-a-lifetime vacation.

Finally, at some point, you’ll need to plan for your healthcare expenses during old age. These expenses may seem like they’re in the distant future – and they are! Ideally, we all live to see very long investing time horizons in our retirements.

If you’d like help planning for your first year of retirement, then click here to set up a quick, complimentary introduction call to see if Prana Wealth is a good fit. We do still have the capacity to take on new clients.

As a fee-only financial advisor in Atlanta, we can (and do) work virtually with clients all across the U.S. and we’re here to help you when you’re ready.

The information contained herein is intended to be used for educational purposes only and is not exhaustive. Diversification and/or any strategy that may be discussed does not guarantee against investment losses but are intended to help manage risk and return. If applicable, historical discussions and/or opinions are not predictive of future events. The content is presented in good faith and has been drawn from sources believed to be reliable. The content is not intended to be legal, tax or financial advice. Please consult a legal, tax or financial professional for information specific to your individual situation.
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