Transitioning Into Retirement
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On today's episode, we are dissecting a quote that was given to me while waiting in line to get an autograph from Mike Eruzione, the captain of the 1980 USA Olympic hockey team—the Miracle on Ice. A gentleman behind me mentioned he had retired three years ago, and his words really stuck: "The first year was terrifying, worrying about running out of money and what I was going to be doing with my life. But I've settled in nicely, year three."
Q1: Why is the first year of retirement so terrifying for so many people?
It's not surprising at all. I build income-based retirement plans for clients, and there's a pattern I see consistently. When people are preparing for retirement, there's excitement in the room—they're ready, they have enough money, the plan looks great. Then six months to a year after retirement, many people struggle. It's a loss of identity. When somebody retires, they're losing two things: their income and their identity. And those fears are all wrapped up together.
What was surprising about this particular gentleman is that he was in the industry—a trader on the bond desk for a very large RIA. He understands money and financial planning. Despite having someone run projections and do all the things we do for our clients, he was still terrified that first year. That really shows how powerful the emotional shift is.
Q2: How does the shift from saving to spending affect people psychologically?
For 40 years, you've been making deposits into your retirement accounts. That's all you've known. You've been a diligent saver. It becomes part of your identity. Then suddenly, you have to start making withdrawals. That's a really hard mental shift. I try to take the conversation away from assets and start talking about income. Retirees can more so resonate with income over assets. When we build a thoughtful plan that shows a consistent stream of income—just like a paycheck—it provides confidence. And that confidence allows people to actually enjoy their retirement instead of living in fear.
Q3: What are the two biggest fears retirees face?
The first is the fear of running out of money. You've been hoarding water in the desert for 40 years, and now you have to start drinking it. That's scary. There's a scarcity mindset that kicks in, even when the math says you're fine.
The second is loss of identity. For 35-40 years, you've defined yourself by your occupation. "I'm a banker. I'm a nurse anesthetist. I'm a financial advisor." When someone asks "What do you do?" and you're retired, that answer is gone. Sure, you're a father, a husband, all those other things—but the thing you most often led with is no longer there. That's a really hard emotional shift.
Q4: How can retirees overcome the loss of identity and find purpose?
A great reframe is to stop asking yourself "What do I do?" and instead ask "What do I love to do?" Start teasing out your hobbies, interests, and passions. What fills your calendar when you don't have to go to the office anymore? Grandkids? Pickleball? Golf? Maybe taking free classes at a local college to keep your mind sharp. Then structure it—literally put it on your calendar. Humans are creatures of routine. If you plan your week with activities you love, you've now created new obligations and purpose. It sounds simple, but it works.
Q5: Why is it so important to have a plan for the transition?
Imagine you're cruising down the highway of life. If you pull the e-brake and retire without a plan, you're going to spin out of control. But if you downshift—slow down gradually and see what life looks like beyond retirement—the transition is smoother. We've had so many people say to us after retiring: "I wish I did it sooner." You can add a few more dollars to your balance sheet by working an extra year or two, but you can't get that time back. Time is the most finite resource on the planet.
Q6: What's the bottom line for someone approaching retirement?
A good plan provides confidence. Confidence allows you to spend and enjoy yourself—especially in those first few years, what people call the "go-go years." That's when you should be enjoying life, not living in fear. We structure a paycheck for our clients so they see that consistent deposit hitting their bank account every month. We handle the nitty-gritty—the tax impact, the projections, the risk management. We help with the emotional transition too. For the majority of people we work with, that first year or two is scary. But they settle in. And they often tell us they wish they had done it sooner.
