Surprising Things You May Not Know About Retirement

Welcome to Ewa’s finlit podcast. Ewa is a fee only RAA based out of Pittsburgh, Pennsylvania. We hope all listeners of this podcast will benefit as we deep dive into complex financial topics that we will make simplified for you. And we hope that this really serves as a catalyst so that you can make the best financial planning decisions for your family and also save time.
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Speaker 2
00:28
Hi, everyone. Welcome to this week’s episode of Finlit by EWA. I’m joined by Jamison Smith, one of our wealth advisors. And we are going to talk a little bit today about kind of a different topic that stems from some research that we’ve done, client conversations, and some podcasts that we’ve listened to, and we talk a lot about retirement. So I think this is a topic that people might resonate with a lot of our audience, and it is about the non numbers aspects of retirement that we don’t really talk about a lot. You see in the news often and articles, you know, how much money do I need to save in retirement? Am I able to retire? But there’s a lot of other things that come along with retirement, so we’re gonna talk about all of those things today.
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Speaker 2
01:07
So, Jameson, why don’t you kick us off and talk a little bit about, like, kind of the mental and emotional health aspects of retirement that can affect people, especially early in that cycle?
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Speaker 3
01:17
Yeah, I think so. It’s easy to look at your balance sheet, look at your investment accounts, and think, okay, I have enough. Enough money to retire, support my lifestyle, and I’m just gonna stop working. That’s oftentimes a hard reality, because most of the time, especially as a lot of clients we’re working with, they’re very successful in their careers. They’re very high income earners. They’ve spent the last 20 to 30 years working really hard, working a lot of hours. They’ve probably made a lot of sacrifices to get to where they are, and a lot of times, your work becomes part of your identity. So to completely stop doing that can be very hard, mentally and emotionally. So one study that I like that really replicates is, I think it’s called the nun study.
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Speaker 3
02:01
And so it literally, they studied this group of nuns and said, like, the point of the study was there was a correlation between the nuns that didn’t have, like, fulfillment or some sort of, like, job or something that they’re working towards. Their life expectancy was, like, cut in half versus, like, the nuns that, like, continued working, doing something to keep busy, and they had some sort of, like, fulfillment, mental stimulation, and I think that’s very true for retirement. You know, there can be a lot of mental health, depression if you just stop working and you have no sense of purpose. So let’s take a deep dive into that. Stephanie, any thoughts?
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Speaker 2
02:39
Yeah, absolutely. I think when you. If there’s a hard stop, like you said, from work. So, like, a 40 hours week or more, a lot of our clients are working, you know, more than 40 hours a week. And a lot of, like you said, their identity is tied up in that. Waking up, you know, first day of retirement, no schedule, you know, no reason to kind of hop out of bed, get your morning routine going. I think that lack of structure can be really difficult for people to adapt to. And then on top of that, you kind of have, even if you’re not really in a social type job, like, there’s. There’s some social isolation that can come with not going to an office or a hospital or your law firm, whatever it is that you’re working.
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Speaker 2
03:17
So it’s almost like a losing of status and identity and structure and schedule and your social life kind of all in one. So that can be a really tough transition. Just not being around people that you’re used to being around, having a congenial conversation and just being able to have something that you go to every morning. So I think that’s. I mean, that’s a very real thing that people don’t think about. They’re looking to get to that finish line of, okay, this is my last day of work. But then what?
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Speaker 3
03:44
I think this is, like, super interesting. Do you know what the number one reason that makes or breaks somebody enjoying being at work or hating being at work?
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Speaker 2
03:54
I think it’s the people that they work with. Right.
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Speaker 3
03:55
Having a friend.
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Speaker 2
03:56
Oh, okay.
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Speaker 3
03:57
Having a friend that they work with. So if you. Yeah, the people coming into socialize, and if that just totally goes away, you can be, you know, mentally bad spot.
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Speaker 2
04:06
Absolutely.
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Speaker 3
04:06
If you don’t do something. Like, I have a friend that. He was a executive, retired executive, huge company. And I think he has, like, the best retirement job in the world. He just, like, serves on four boards, like board of directors, and he works, like, ten to 15 hours a week. I’m like, that is, like, perfect.
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Speaker 2
04:21
Absolutely.
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Speaker 3
04:22
Like, you’re still doing, obviously, financial independence, still doing something stimulating in your field in some way, and then obviously have much more free time to enjoy your money.
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Speaker 2
04:30
Well, I think that kind of, like, segues into another point, sort of sub point. Underneath this topic is, like, having not only are you retiring, like, from your job, but you need to have things to retire to. So whether that’s something, like you said, related to your field, you’re serving on a board, maybe you’re part of, like, a really meaningful charity that’s had, like, something near and dear to you know, it’s associated with your family or whatnot. That’s a purpose. So having something to retire to is huge. Even if that’s something like, you know, starting classes, you know, structuring more vacations with your spouse, but not necessarily focusing on the from, but focusing, like, on the two can really help that transition.
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Speaker 3
05:07
Actually, the same person I was having a conversation with, and I asked him, like, were just talking about, like, what drives people to be successful in their career and accumulate wealth. And kind of, we’re talking about, like, you have this sense of, like, almost insecurity of, like, you’re, I have to, like, achieve and make sure that I’m doing something to earn an income and achieve wealth. And I asked him, I was like, now that you’re retired or scaled back, like, how does that feel? Like it never goes away. So he’s like, so if you’re just not doing anything, you’re gonna be really, like, at least what he said, very anxious, very, like, still have that sense of achieve. Achieving, yeah. And he said, you have to be, you know, doing something to scratch that itch, for sure.
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Speaker 2
05:49
Absolutely. I mean, and I think that also, like, were, we talked about this on a previous podcast is like, kind of the two terms, which is tiered retirement and then also, you know, financial independence versus, like, retirement. So achieving, like, financial independence, you know, just having the ability to structure your day how you, like, vacation, when you, like, serve on that board, if you like, but without thought or concern over the need to accumulate or, you know, do I have enough? So taking that out of the equation and just saying I have the independence to do what I want to do when I want to do it, that’s freeing, mentally speaking. But that tiered retirement approach, which is maybe you’re not having that hard stop. Like, I feel like that’s been the definition. It’s like there’s this very hard stop.
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Speaker 2
06:28
It’s like you’re going, going 70 miles an hour, like, brick wall, like, you’re done, but having the opportunity to over time, whether it’s five years, whether it’s longer than that, to slowly step away from that 40, 60 hours a week job and taper, that is a lot more effective, I think. And it helps people adjust.
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Speaker 3
06:45
Yeah, no, totally. Looking at the notes here that we have prepared. Is this true? Divorce rates increase?
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Speaker 2
06:50
This is true. So this is a recent podcast, and we can put this in the show notes. Actually, Nick on our team listened, too, and apparently we all kind of hear the stat that divorce rates are 50% or more. 50% more of marriages fail. Apparently the divorce rate amongst retired people is increasing, and this is attributed to the fact that, kind of going back to what you said, people are working, working. They’re really committed to their career. They’ve sacrificed things throughout their earlier years of life, whether it’s time with their kids or time with their spouse. And then all of a sudden, you quit working or you taper back work, and you have a lot more time with this person.
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Speaker 2
07:29
So if you haven’t cultivated, you know, and focused on that relationship throughout those earlier years, all of a sudden you’ve got 40 hours a week together. How do you fill that time? You know, are you guys still connected? Are there things that you’re disconnected about? So I guess this is cropping up and becoming more common where people over the age of 60, they’re kind of in this new structure with their spouse, and it’s not working that well. So I wouldn’t say that’s, like a. Something to focus on or be fearful of, but I think it’s something for younger people to think about. Like, make sure you’re spending time with your spouse or your partner and cultivate your relationship before retirement. Don’t assume it’s just gonna be perfect once you hit 60, 65.
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Speaker 3
08:06
Yeah, I guess it makes total sense. Never really thought of that, but, like, it’s, like, empty. I think the statistics are, like, 50. I just listened to a podcast from a divorce attorney, so it was, like, super interesting.
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Speaker 2
08:17
Was that the Huberman podcast?
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Speaker 3
08:18
No.
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Speaker 2
08:18
Okay. Because he had someone on that was talking about this, and I thought it was really interesting.
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Speaker 3
08:22
I thought of you, like, 56% of. I think it’s over 50. It’s 53. 56 of marriages and in divorce. And then of, like, let’s say the 50 that stay together, half of those are actually, like, in a happy relationship, and the other half are staying together for, like, religion, kids, finances. Like, there’s some reason that they just, like, feel like they have to stay.
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Speaker 2
08:44
Probably feel like it’s too late to start over. It’s just comfortable.
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Speaker 3
08:47
Yeah.
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Speaker 2
08:48
Uncomfortable being comfortable, I guess.
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Speaker 3
08:49
So, basically, based on those statistics, 25% of marriages are actually, like, happy and successful. So when you put that into perspective, a lot of total assumption. I’m not married, but I think a lot of people, just from seeing this in action, people work, like, if you’re in an unhappy marriage, you work to get away.
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Speaker 2
09:06
Right.
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Speaker 3
09:06
And if all of a sudden you have to come.
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Speaker 2
09:09
Yeah. It’s an escape mechanism for sure. Like, if you like your work or you’re very engaged in your work, that can be a way to, you know, avoid an uncomfortable situation at home. But, like, I was kind of, just real quickly, kind of interjected was also, like, empty nest syndrome. So, I mean, we have a lot of kids in our household, so, you know, they take up a lot of time. It’s a lot of effort. It’s a lot of financial stress, you know, to support kids in college and private schooling and all of that. So take all of that out of the equation, and it’s like, wow, okay, what are you left with? Just you and your partner, most likely. So, interesting. So that kind of segues too into, like, lifestyle changes that can occur.
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Speaker 2
09:43
And this I thought was a kind of funny statistic is that retirees find that they’re consuming, like, more alcohol once they retire. And I thought that went through for a minute because I’m like, well, why would that be? Well, I guess, like, you have a lot of free time. If you’re going on a lot of vacations. You, maybe you’re overindulging or you have a lot of more social engagements versus, like, professional engagements. So I guess it’s just kind of, like, environmental more so than much.
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Speaker 3
10:06
Look at when the pandemic happened and people were quarantined.
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Speaker 2
10:11
Like, right. Alcohol went through, sales were through the roof.
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Speaker 3
10:13
Right. So that makes sense. Yeah. And I think when you’re, when you have more free time, I think that, like, alcohol consumption just in society and, like, just in general, it’s like a default.
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Speaker 2
10:26
Yeah.
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Speaker 3
10:26
Like, I know, like, people my age, like, it’s like, oh, well, if you have nothing to do, just go, yeah. So if you don’t have that time filled and all of a sudden you have this empty time, that’s a really easy default to do. And I can see how that can, you know, spiral and you start drinking more.
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Speaker 2
10:42
Yes. I think just being aware of that maybe is enough to just kind of have that in the back of your head if you’re a new or upcoming retiree.
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Speaker 3
10:48
Yeah. And the second one for lifestyle adjustment, a lot of people think that they’ll, well, when I’m retired, some of my expenses are gone. I’ll spend less money. But what often happens is when you have more time you spend more money. So we’ve seen people retire and end up, like, doubling their spending just because they’re traveling, they’re going out and doing things. They’re not just at work all the time making money, they’re using that time to spend.
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Speaker 2
11:13
Yeah, you’ve got a lot of time to fill during those days if you’re not in work environment. So let’s wrap this part up, sort of like the lifestyle stuff, and talk a little bit about structure. And people are always, I think I always hear this, oh, I can’t wait to not have to have a schedule or, you know, have this structure in my day when actually something that can be helpful is to have some structure in your day. And everybody is a little different in this.
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Speaker 2
11:36
But I think we’ve talked to clients, too, where they’re like, it’s helpful to have some type of structure, whether it’s like Monday, Wednesday, Friday, I volunteer, and on Tuesdays and Thursdays, I go to yoga or I, you know, I’m involved in an organization, so kind of letting it be fluid and filling out what feels best for that person and that individual. But having a little bit of structure initially is going to help that transition. So, but there’s lots of positive stuff, too, lots of positive changes that can happen in retirement. So let’s talk a little bit about this, because I think this is overwhelmingly, like, it’s exciting to hear of all the good things that can happen to you when you retire. So number one is happiness and retirement. Statistically, people who are retired are reporting that they’re actually, like, very happy.
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Speaker 2
12:16
So I think that’s awesome. So, you know, it’s not all, like, negative lifestyle changes, potential things that can go wrong. It’s like, okay, this can be a very, like, fulfilling, very happy, very exciting time in life.
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Speaker 3
12:26
Yeah, I think a lot of back to us at the beginning, a lot of people, especially with clients we work with, if they are working all the time, they’ve made sacrifices, and they kind of say, like, oh, now’s the time I need to, like, go spend time with friends and family, go travel. And that can obviously be a big positive. You have the time, you have the money and resources to do so. Now you can really, like, do a lot of those things.
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Speaker 2
12:47
Yeah, I mean, we talk about paradoxes a lot. And so, you know, there’s that fine line between, like, providing for your kids and, you know, accumulating for this later part in life. And you do make sacrifices sometimes it’s like you work late, you might miss the kids school play or you might not be able to drive them to and from a game, whatever that may be. So now that you have the time, definitely focusing on family can be very fulfilling.
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Speaker 3
13:10
And second one we’ve seen, I guess I’ve seen this go both ways, but for the positive, improved mental and physical health because they have time to actually focus on it. So if you’re, unless you’re very intentional about your health and fitness while you’re a busy professional and working, sometimes it can, you know, fall in the back burner and we forget about it. So we’ve seen retirees, they have the time, they have the money. Maybe they hire a trainer, maybe they, you know, they’re using different avenues to actually improve their fitness. Physical and mental health.
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Speaker 2
13:42
Yeah. I mean, we’ve heard even, like, stories and I’ve certainly read things and listened to podcasts where people have said, you know, stress has actually made them physically sick. So depending on the nature of your work, how you feel about your work, how you balance things at home, like de stress activities, whether it’s work out, it could be like we’ve even read a little bit about, like, getting a pet during retirement is great for your companionship. All of these things can improve, you know, your mental and physical health while reducing stress, because stress, you know, can be a killer, quite literally. So if you’re paying attention to that during retirement, you know, you’ve pushed, push.
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Speaker 2
14:15
You kind of scale back a little bit, assess your mental and physical health, you know, make those doctors appointments maybe you’ve neglected to do over the last, like, 20 years and invest some time in yourself.
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Speaker 3
14:25
Yeah. And then next one we have create a bucket list to figure out all the things you haven’t done in your life that you’re still, you know, whether you didn’t have the time, didn’t have the money. Now, if you have the time and the money and you still have your physical health, what are these things that you want to do while you’re still alive? Create that list and go do it, and that’ll create a lot of fulfillment and, yeah, should usually generates happiness and, you know, a good way to fill the free time.
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Speaker 2
14:53
Yeah, I mean, I think that’s a good place to kind of wrap it up and just say, like, you know, that obviously, like, we all know there’s like a finite timeline in life and, you know, we wait until we’re 60, 65 to retire. And I think for some people, it’s a mental roadblock. Like, oh, my gosh, I’m gonna create this bucket list. That sounds kind of morbid. I’m afraid to put all this on there because what happens if I check it all off? I’ll, like, add some more. Right? Like, life is meant to be lived. And we always talk with our clients about living your life by design. And I think going through that exercise is really valuable because it makes you think about, like, what you’re gonna prioritize. So I think this was really neat.
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Speaker 2
15:24
I hope that it was helpful to our audience. Anything else to add before you wrap up?
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Speaker 3
15:27
Yeah, I would say as you’re getting ready to retire and before you retire, or as you’re getting ready to and as you retire, just really be intentional about how you’re gonna spend your time once you stop work. And then make sure you have clear outline of your goals and values and make sure that you’re analogy I love is like, you have 24 hours in a day, you’re going to sleep eight, so you have 16. Imagine each hour is like a stack of like, poker chips. You’re sitting at a casino table, and you can allocate those 16 chips in different ways. And if you have a clear outline of your top values, you can strategically place them all on your values to make sure you’re really intentional about how you’re spending your time.
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Speaker 2
16:06
I love that. I love it. I like a visual always. So, no, thank you for that. So, yeah, catch us next week. If this podcast has been helpful, definitely share with your friends and family. Give us a rating, and don’t hesitate to reach out with questions.
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Speaker 1
16:19
Thanks for tuning in to our podcast. Hopefully you found this helpful. Really hope this is as beneficial and impactful to as many people across the nation as possible. So hit the follow button, make sure to rate the podcast, and please share with any friends or family members that would also find this beneficial. Thank you very much.
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