Dealing with Financial Stress in Retirement

Although retirement is often seen as a time to relax and enjoy a slower pace of life, it can herald new sources of anxiety and stress: not least of these is the pressure of making ends meet financially once your income has dropped.

Along with spending more time with grandkids, playing golf, traveling, and doing all the things you’ve been waiting to do for the last forty years, a large proportion of retirees spend time worrying about money. You need to find ways to cope with the financial stress of retirement in order to enjoy your new lifestyle.

Dealing with Financial Stress in Retirement

Why is financial stress so common?

A recent survey by Go Banking Rates found that more than half of Americans have less than $10,000 saved for retirement, a figure that falls woefully short of most people’s needs over the average of 20 years’ retirement, and one that produces a savings gap of between $6 and $14 trillion, according to the National Institute on Retirement Security. With some estimates of the costs of healthcare during an average retirement standing at around $100,000, it’s no wonder that this savings gap is so large.

The risk of stress in retirement

A recent study on the effects of retirement on health by the Harvard School of Public Health found that of the 5,422 individuals included in the study, 40% of retirees were more likely to have a heart attack or stroke than those still in work. The risk was highest in the first year after leaving work, and plateaued thereafter, suggesting that the stress of the transition itself was the cause of increased risk, rather than the state of retirement itself. A study by the American Institute of Stress researching the 43 most stressful life events listed retirement at number ten, testament to the importance of managing psychological pressures during this time.

The effects of stress

The American Institute of stress run through some of the most common consequences of having too much stress in your life:

  • Depression and anxiety.
  • Heart attack, stroke, and hypertension.
  • Immune system dysfunction and susceptibility to infections from the common cold and autoimmune diseases to AIDS and certain cancers.
  • Skin conditions.
  • Insomnia and degenerative neurological diseases.
  • Gastrointestinal issues.

With a range of effects as far-reaching and serious as this, it’s crucial that you learn to manage your stress levels to stay both physically and mentally healthy.

Dealing with Financial Stress in Retirement

Dealing with your financial difficulties

Don’t avoid the problem

Issues of shame about not being financially successful, as well as an inability to face the reality of a difficult financial situation, can lead to people avoiding the problem of lack of money. This can lead you into debt and compound any existing problems. Which leads us to:

Ask for help

Get advice from a professional about the best way to cope with your financial situation. This person should be an expert, not your friend or son-in-law, but a recognised, qualified financial advisor who has your best interests at heart and knows how to present all your options clearly and without jargon. Once you know the choices available to you, you can select a path in the knowledge that you’re making an informed decision which makes the best of your situation.

Make a plan

Having a concrete schedule for expenditure and saving can make a big difference to your peace of mind. Share this with those close to you so you can help hold yourself accountable for your own outgoings.

How to alleviate the symptoms of stress

Get company

If you’re living alone, it’s vital to seek out regular interaction with others. Lisa Berkman, Harvard professor of Public Policy, says that social activity is directly linked to a longer lifespan, due to its positive effect on the brain and mood. Join a club, take up a hobby, or get together with others who are feeling the sting of isolation to keep your stress levels low and share your concerns and worries.

Keep learning

Despite common misconception, the brain tissue of retirees still has sufficient plasticity to benefit from the continuation of learning and creativity. Professor Vaillant, professor of psychiatry at Harvard Medical School, spearheaded a study – the Study of Adult Development – that included exploring the factors that retirees found enjoyable and beneficial: using and exploring creativity was one of the four primary factors on this list.


Maintain structure and purpose

Keeping structure in your day can help you manage mental pressures by preventing you from ruminating and slipping into a state of inactivity. Get up at a fairly set time and get dressed for the day. Add exercise and interaction, eat healthily according to your physician’s advice, and try and have regular engagements every day or week at given times. This will help ease the transition from working life, which is normally quite strictly regimented, to a lifestyle where you can do what you want, when you want, with fewer immediate consequences.

FG Editorial Team
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