The challenges of retirement aren’t just financial

James Gruber  |   03rd May 2024  |   5 min read

Graham Hand’s update last week, five months on from his cancer diagnosis, understandably struck a chord with readers. It wasn’t just his battle with brain cancer. It was also his revelations of struggling with not being able to work, and in some ways, of losing his personal identity.

It brought home that in debates about retirement or semi-retirement, there’s a lot of focus on the financial aspects: income, tax, estates, wills, superannuation, and the like. Less attention is paid to the psychological challenges of retirement, which can be even more demanding.

In response to Graham’s article, one subscriber helpfully pointed to a book addressing some of these challenges called, ‘The Four Phases of Retirement: What to Expect When You’re Retiring’ by Dr. Riley Moynes.

What are the four phases of retirement?

Moynes, a former educator and financial adviser, wrote the short book after his own struggles in retirement and subsequent interviews with other retirees.

He believes that there’s a predictable and identifiable pattern to retirement, and it involves four phases:

Phase one: vacation time

Moynes is Canadian so you’ll have to forgive his use of ‘vacation’ instead of holiday. Phase one, in the initial months and years of retirement, is like a holiday. You get to do the things that you wouldn’t normally do. You get to fulfill bucket list wishes, such as extended travel to places that you’ve always wanted to visit, like the south of France or Tuscany, or buying a new toy that you’ve always wanted, like a Porsche or boat.

At first, this phase is exciting. The unstructured time, being your own boss, and freedom. Yet, after a while, it can get boring and a little egocentric. Put simply, you overextend your holiday.

Moynes says you know when you’re in phase one when:

  • You feel a sense of relief, exhilaration, and accomplishment about your just completed working career.
  • You appreciate having no set routine for the moment.
  • You are regularly making travel plans.
  • You are serious about improving your golf/tennis/bowling game.
  • You’re considering a ‘trophy’ purchase such as a sports car, sailboat, yacht, or a holiday property.
  • You look forward to spending more time with your spouse.
  • You look forward to spending more time at the holiday house or puttering around home.

Phase two: feeling loss and feeling lost

The move from phase one to phase two involves the stark realization that the life that you knew for decades no longer exists. Most people work for +40 years, climbing their way up the corporate/career ladder. They may achieve a certain level of success, responsibility, and even prestige. They may even have people report to them.

When retiring, by choice or circumstance, all of that suddenly disappears. The influence or power that you have at work, part of your identity, is gone. Moynes calls this the “plunge into the abyss of insignificance”.

Retirement not only impacts your identity but your routines and structures. Work imposes a routine and structure. Without it, you lose that, and the friendships that accompany work. It can make you feel alone and vulnerable.

And you must spend much more time at home with your spouse, which can have its challenges. I’ve noted in a previous article how research has revealed that the happiest retirees are women who get divorced between the ages of 60 and 65. On this, retirement researcher, Dr. Michael Finke, says:

“I think that relates to a problem that very often happens in a relationship when people retire. And that is that men tend to have a more limited social network and oftentimes that social network revolves around their work. And women tend to do a better job of investing in relationships that they can then draw from in retirement outside of the workplace. And so, what that means is that women oftentimes want to be able to maintain those relationships in retirement. Men all of a sudden become far more – in an opposite sex couple, they become far more reliant on their relationship with their wife. And the wife is often struggling to be able to manage her existing relationships and this perceived obligation that she has to her husband. And oftentimes they may not have developed the capabilities to spend all day with each other. They get married, and they see each other for breakfast and dinner, but not necessarily for lunch.”

In phase two, Moynes says you suffer five unavoidable losses:

  • Structure
  • Identity
  • Relationships
  • A sense of purpose
  • A sense of power

Phase two can led to bouts of depression, alcoholism, family breakdown, anxiety, and other stressors.

Moynes notes there is a group of people (10-15%) where phase two is less of a problem. These people have created structure and meaning outside of work, and the transition to retirement is more seamless.

However, for most, suffering the five unavoidable losses can be traumatic. And you can either go into your shell or push forward.

Phase three: trial and error

This phase is about finding new meaning and purpose, and it often involves trialling different things to see what works.

Moynes recalls his own efforts, from considering going to law school, to undertaking courses in mediation, and helping his son out with his magazine business.

He says that you know when you’re in phase three when:

  • You begin to ask yourself, “How can I still contribute?”
  • You explore options that will allow you to make contributions and feel good about them.
  • You commit to a specific venture.
  • You are prepared to go back to the drawing board when your venture of choice doesn’t work out.

Phase four: reinvent and repurpose

Moynes says that not everyone reaches phase four. Some people stay in phase one where they are happy to satisfy their own needs – the ‘it’s about me’ phase – and there’s nothing wrong with that. Others don’t get through the struggles of phase two. Others reach phase three, yet when trialling different things doesn’t work out, they step back to phases two or one.

Moynes believes that it’s important for you to be able to identify which phase of retirement you’re in. And that when you reach phase three, it’s crucial to ask questions about what you want to get out of the next phase of life and what you want to become.

In Moynes’ experience, for those who are most successful in breaking through to phase four, it almost always involves some level of service to others. That can be via a volunteer role or offering services for a fee.

Moynes thinks that you need to look at your unique skills and experiences, and how they might be best used to help others. That can provide renewed purpose and a ‘sweet spot’ for retirement.

That conclusion might not come as a revelation. It’s the type of advice that you get during your working career. Yet things change, especially as you get older, and it may be worth following Moynes’ guidelines to make the most of your retirement.

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