5 problems people have when they retire

5 problems people have when they retire

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Everyone desires the sure thing, the safest path, and the most unquestionable of choices. But life is full of uncertainty, and there is no time like the present to see this.

With uncertainty comes risk. Only gamblers find risk compelling. And that’s because they know how to manage it (or at least they think they do). Typically, though, no one likes risk.

Crossing the threshold into retirement magnifies the uncertainty you must deal with. Wouldn’t it be to your advantage to fully understand what those experienced with retirees see as the major problems people have when they retire? Here are five such problems for you to think about and possibly prepare for.

Organizing Finances

If you don’t plan, you plan to fail. The same goes for organizing your finances. Of the problems mentioned in this article, organizing your finances ranks as the one you should do well before you retire. By getting things in order in advance of retirement, you’ll better prepare yourself for the choices you have to make.

“The main problem people face upon retirement is organizing their financial lives and finding new purpose,” says Robert Reilly, a member of the finance faculty at the Providence College School of Business and a financial advisor at PRW Wealth Management in Boston. “If they have not already done some formal financial planning, replicating their old paycheck can be a daunting task. Most workers are used to a certain cycle for their paycheck and had a routine in place to pay their monthly bills. Significant time and effort can be required to figure out a new budget, new payment methods for healthcare and other major bills.”

It’s natural to have several questions when you retire. Organizing your finances represents the best way to tackle the uncertainty of retirement.

“The two cornerstone questions faced by those anticipating retirement are ‘Am I going to be OK?’ and ‘Can I afford to financially support the lifestyle I have worked all my life toward?’ Neither of these questions can be answered with the level of accuracy and confidence that people want until they have taken the time to organize their thoughts about what being OK in their retirement looks like,” says Doug Dahmer, CEO and founder of Retirement Navigator in Burlington, Ontario. “Retirees significantly underestimate the amount of cash flow that can be uncovered during retirement by employing a strategically sound drawdown strategy. The financial impacts are often measured in the hundreds of thousands of dollars. However, there is no way to optimize a retirement lifestyle plan that cannot be successfully funded and there is no way to develop a strategically sound retirement funding strategy without the granularity of understanding where the peaks and valleys of year-to-year spending occur. As such, they must organize their thoughts and pre-test their expectations as it relates to their specific version of knowing they will ‘be okay’ once they have retired.”

Transitioning to a new lifestyle

Once you step into the river of retirement, you’ll find yourself immersed in a different current. It’s not the first time you’ve entered a whole new world, but it’s probably been a long time since you’ve had that experience. As mentioned above, the first challenge—or self-doubt—will center on money. But, in the end, it comes down to your ability to live a new life.

“The main problems I see as a wealth advisor often hit several areas,” says Clint McCalla, Senior Wealth Manager at LourdMurray in San Diego. “A big one is not saving enough based on the lifestyle the retiree wants. They simply can’t afford to do the things they want to do. The other problem is boredom or a loss of purpose. I also see relationship issues emerge between significant others as you are now potentially spending more time together, which is an adjustment. For anyone going through this transition, you need to be realistic about how quickly you adapt to a new lifestyle. It isn’t going to happen overnight. Take time to figure it out, and don’t pressure yourself to meet the expectations you had going into retirement.”


The greatest problem is usually the one you least expect. When it hits, it hits big. It means you haven’t prepared for it. As a result, it leads to anxiety. The angst can be justified, or it can simply result from your being surprised.

“The biggest challenge people face when they retire is failing to account for inflation,” says Chris Kampitsis, a financial planner at The SKG Team at Barnum Financial Group in Elmsford, New York. “They assume falsely that the amount they will need to withdraw in year one is the same amount they might need to withdraw in year ten or twenty. People also drastically underestimate their spending. Conversely, they also tend to overestimate how much they can safely withdraw from their nest egg.”

Inflation, even when it trickles in, will have ramifications deep into retirement. It’s one reason financial professionals suggest you keep a significant portion of your retirement savings in long-term investments. This will allow your portfolio to grow even in retirement.

“The main issues for retirees are replacing income in an inflationary environment, preparing for unknown future healthcare costs and long-term care costs, and feeling confident to spend money when they have been good savers,” says Emily C. Rassam, senior financial planner at Archer Investment Management in Charlotte, North Carolina. “I met with a client who is afraid to start distributions even though she has saved well and has plenty to cover current distributions and future expenses.”

Financial Insecurity

All the above problems can lead to the most vexing of worries, that of financial insecurity. This feeling isn’t all bad, as it represents a defensive tactic that can help protect you from the worst-case scenario.

“People usually just don’t have enough to retire,” says Bob Chitrathorn, CFO CFO and vice president of Wealth Planning at Simplified Wealth Management in Corona, California. “They simply retire and will try to make do with what they have, without knowing how long the amount of money they have may or may not last!!!”

There are many factors that can compound your fears concerning money. Working longer may exasperate this (although it may also offer advantages.)

“The main problems people face when they retire are financial insecurity, health issues and social isolation,” says Derek Miser, investment advisor and CEO at Miser Wealth Partners in Knoxville, Tennessee. “Many people rely on their pension income to survive, and if this income is reduced due to higher retirement age, it can cause financial hardship. Health issues often become more prevalent in older age, and these may only be compounded by working longer. Also, many people struggle with social isolation when they retire, as they can lose touch with their work colleagues and struggle to find a new sense of purpose.”


Just because you make it through the money-related obstacles doesn’t mean you won’t have problems in retirement.

For example, do you know the answer to this question: What is the meaning of your life?

Discovering the answer for you is easier to know than you think. Still, fewer spend the time and effort needed to look into themselves. The lack of purpose becomes more apparent once you retire.

“The main problems people face when they retire depends on the situation,” says Anna Rappaport, member and volunteer of the Society of Actuaries in Chicago. “For example, some people have major financial challenges, and others do not; some get depressed and bored. People need to contribute and have purpose in life. If their main purpose was their job, they need to find a new passion and/or purpose. Also, many people retire not by choice–either due to job problems, health issues or their family needing them as caregivers.”

These non-monetary problems can be more detrimental than issues dealing with the financial side of your life. Fortunately, they can be addressed in the same way.

“Retirement can be a challenge for many, and it is a bit of an archaic construct,” says Lawrence Sprung, founder of Mitlin Financial in Hauppauge, New York. “The concept was built when people’s life expectancies were much lower. There can be a tremendous loss of purpose for those that retire early, putting them in a position not to experience joy and undergo mental health struggles. Just like you financially plan for retirement, you need to plan mentally too.”

Don’t underestimate the loss of purpose. During your career, you had a regular schedule. That gave your life purpose. You might even think it gave your life meaning. This all changes in retirement.

“One of the main problems people face when they retire is a lack of purpose and meaning in their lives,” says Dennis Shirshikov, the Head of Growth for in New York City and a professor at the City University of New York, where he teaches finance, economics, and accounting. “Many retirees struggle with feelings of boredom, loneliness, and isolation, which can lead to depression and other mental health issues.”

Whether it’s financial problems or mental hurdles, retirement presents a challenge.

Are you ready to take on that challenge? And what will you do to address these challenges?

There are answers you can consider.

Teacher beats 11-year-old pupil to death


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