19 Dec 7 Hidden Traps of Retirement
My friends at Apex Money recently shared an article that made me think.
The article was from the Harvard Business Review and highlighted 7 Hidden Traps of Retirement, which the writers discovered during interviews with “dozens of highly respected former chief executives.”
As I read the article, I realized the traps of retirement don’t apply only to folks retiring from top management positions.
These traps present a risk to all of us.
Today, I’m presenting each of the 7 Hidden Traps of Retirement and my thoughts on how best to avoid them.
Be forewarned.
Don’t get trapped.
Don’t fall into any of these 7 Hidden Traps of Retirement. Use these tips to avoid them and live a great life in retirement. Share on X
The article that made me think was The Challenges of Retiring from a High-Powered Job, written by three founders of ONXY, an invitation-only group designed to build a community for current and former CEOs. I encourage you to read the article, but I’ll summarize the key points below.
In their work helping CEOs prepare for retirement, the team has discovered seven hidden traps of retirement. While focused on senior managers, I’m taking a different twist with their list and considering how these traps apply to all of us. I’ve taken the liberty of renaming each of the seven hidden traps of retirement to better align with the readers of this blog and providing my thoughts on how to avoid falling into each.
The risks apply during our planning for and transition into retirement. If you’re struggling with the transition into retirement, perhaps it’s because you’ve fallen into one of these traps.
Original Title: Looking through the lens of the present impedes you from seeing future possibilities.
In your final years of work, it’s easy to procrastinate on retirement planning and focus on your current role. You’re busy doing your job and you can deal with that retirement stuff after you’re done working. That’s a dangerous approach that far too many people follow. It’s one of the traps of retirement for a reason. Seeing beyond your current role requires a creative imagination, the type that has likely been dormant for years. Losing your sense of identity can be a shock in retirement, but the impact can be minimized by the appropriate planning.
How To Avoid The Trap:
Forget about your current role for a minute. After all, it will be irrelevant the day after you retire. (Let that sink in)
Think about what you want your life to BECOME in retirement. You’ll no longer have that title, and that sense of identity you get from your work will be gone. That’s scary, and something a lot of people avoid thinking about. Don’t be that person. Rather, think about your new identity in retirement. What do you want to be known for? What areas are you curious about? What did you do as a child that you’d like to revisit now that you’re free from those chains of work? Carve out time to think about what impact you want to have with your newfound freedom. It takes some time, so be patient. The important thing is to think beyond your current role and imagine what you can do to make a difference once the job is gone.
In What I’ve Learned From Writing 400 Articles About Retirement, I wrote about my new identities in retirement (writer, running a charity, grandfather, etc). A quote from that article is relevant here, and I’d encourage you to adopt it as one of your goals in retirement:
“I’m not who I used to be, and I love who I’ve become.”
Original Title: A wealth of options can overwhelm and paralyze decision-making.
That busy schedule and rigid structure will disappear when you retire, and you’ll be looking at a “blank sheet of paper.” Having no schedule or structure to your day sounds appealing, but it becomes disorienting after a surprisingly short period. Your brain will start searching for something to do, and you’ll have difficulty prioritizing what you want to do with your life.
How To Avoid The Trap:
Take some quiet time to think about what impact you want to make with your retirement years. Think about the causes you have a passion for. Listen to your inner curiosity, and take that first step to see where it leads. When you’re thinking about something you could do, compare it to that list of things that matter to you. For example, you may have enjoyed working with younger people during your career and would like to find a way to do that in retirement. Perhaps you’ll become a mentor, a Big Brother, or a business coach to the next generation.
Find your “North Star” and pursue only those opportunities with strong alignment to the things that matter to you. Don’t pursue “busyness” for the sake of being busy. Rather, invest your time in areas where you have a real interest (lack of experience doesn’t matter, as I’ll demonstrate below).
Using your time to impact an area you care about is the true path to happiness.
Original Title: Relying on your old network can distract you from the critical task of building your new one.
Everybody thinks they’ll keep in touch with folks they worked with. Almost no one does. It’s one of those strange realities of retirement, and it will likely happen to you. (Note this statistic in “Shining The Light on Retirement Blind Spots”: 62% of retirees missed the relationships from work, whereas only 29% of pre-retirees expected it to be an issue). The relationships at work are about “work.” Once you’re out of the scene, it becomes difficult and awkward to maintain those relationships.
And yet, relationships matter.
I dedicated an entire chapter in my book to relationships. People think about their paycheck stopping when they retire, but they often overlook the “softer” benefits they receive from work which will also disappear:
- Structure
- Sense of Identity
- Relationships
- Sense of Purpose
- Sense of Accomplishment
Ironically, these 7 traps of retirement align almost perfectly with that list. That doesn’t surprise me in the least. If you’re a regular reader, you know I’m passionate about the importance of the “soft side” of retirement.
How To Avoid The Trap:
In your final year or two of work, be intentional about building relationships outside your workplace. Your mission: build relationships that will be there after you retire. Spend a few Saturdays volunteering at a local charity. Get involved with a few Facebook groups in your area that do things that interest you. Join a gym and learn to play pickleball. Join a local hiking club. Go to a Trout Unlimited meeting. Call an old friend. Attend a local church.
Explore whatever interests you and pay attention to the people in the groups you visit. In time, you’ll find a group that feels “right.” Pay attention, that’s where you’ll get your retirement relationships.
They matter more than you expect.
Original Title: Delaying retirement planning can lead to urgent, anxious, and awkward outcomes.
A quote from the original article is telling:
“The majority of CEOs and executives we talked with told us they failed to appropriately plan for their retirement — and nearly all told us they waited too long to start.”
It is, perhaps, the most common of the traps of retirement. Many people are nervous about retirement, and procrastination is a common response. “I’ll deal with it when I’m retired,” many people think. That’s one approach, but research has shown that taking that route will lead to a difficult transition. The cliff is coming, and you can prepare your parachute or just take the leap and figure it out once airborne. I recommend the former approach, it makes for a much smoother landing.
How To Avoid The Trap:
As I was in my final working years, I was interested obsessed with figuring out why some people had a smooth transition to retirement, whereas others struggled. As I’ve written before, there’s one single element that is the most highly correlated with the smoothness of your transition. That element?
The amount of time you spend planning for retirement in your final years of work (both on financial and non-financial issues).
Spend a lot of time planning, and your retirement will be smooth. Ignore it until you retire, and buckle in for a rough ride. As I wrote in The 4 Phases of Retirement, only 15% of retirees skip over the dreaded Phase II. I was lucky enough to be one of them. So can you.
Take time to pack your parachute before you jump.
Original Title: Decisive behaviors that worked for you as an executive can work against you in retirement.
I told the story in my book about a friend who had been a Process Improvement expert during his career. Shortly after retirement, he made some “suggestions” to his wife on how to more efficiently load the dishwasher. Needless to say, she wasn’t as receptive to the suggestion as his employees had been. They both had a good laugh, and he got the message.
In my case, there were times when my wife would respond to certain comments I made with, “I’m not one of your employees, I’m your wife!”. Message received. Thankfully, it’s been a long time since I’ve heard that comment, and we joke about it now.
When you’re used to a frenetic work environment, it’s difficult to slow down in retirement. And yet, that behavior you’re used to from your working life doesn’t automatically adjust to your slower-paced reality. It takes time to work through the misalignment.
How To Avoid The Trap:
The first step is to be aware that a change to your environment is coming, which should be part of your planning process outlined in Trap 4. Being aware helps deal with reality when it arrives. Give yourself time to adjust, and don’t let your frenetic energy drive you to do things you may later regret. Learn to explore (Trap 6), and you will eventually find activities that align with your drive. Many folks jump back into work (too quickly, IMHO) to resolve the misalignment.
A better way is to give your drive a chance to recalibrate, and then use it in a new retirement endeavor that better suits what you’re trying to become (Trap 1 and 2).
Original Title: Focusing narrowly on the most traditional options limits your ability to maximize your fulfillment.
Retirement is a time for reinvention.
Too many folks, however, look for “things to do” in retirement that are closely aligned with their work experience. They become consultants in a related field. They take a part-time job in the same field. They don’t think “outside the box” to find other things to pursue which may lead to more fulfillment over time. They struggle to find their purpose and get frustrated with what their lives have become in retirement. Money shouldn’t be your motivation as you seek out “creative endeavors.” You’ve achieved Financial Independence, and your motive should be to find ways to invest your energy in areas you care about, things you enjoy, and areas where you can make an impact.
How To Avoid The Trap:
Three years before I retired, I followed my curiosity and started a little blog. It was on retirement, a topic unrelated to my working career. 9 years later, this blog has grown to 16,000+ e-mail subscribers (Thank You) and has become a fulfilling aspect of my retirement. A friend recently complimented me by saying, “I’m impressed by how you created a new identity in retirement. You’re, like, a real retirement expert, and it’s nothing like what you did in your working years.” It was one of the best compliments I’ve ever received. Reinvention, accomplished.
“Maximize Your Fulfillment” = The Goal.
Most folks who find true fulfillment in retirement find it in an area unrelated to their careers. It’s a strange reality, and finding your path to true fulfillment typically requires a creative approach. I’ve consistently encouraged my readers to “follow your curiosity, dare to take the first step, and see where it leads.” Almost everyone I’ve spoken with who has found a true purpose in retirement follows this path.
An example of the approach: My wife followed her curiosity and took a major leap out of her comfort zone to start a charity, Freedom For Fido, building free fences for low-income families with dogs on chains. It was a total departure from her career as a caregiver, and she took that first step despite having no experience in how to start a charity (or build a fence). That first step led to places she never imagined. We recently completed our 150th fence, and we both get more fulfillment from the charity work than anything else in our retirements (the same is true for many of our 200+ volunteers).
Original Title: Waiting for the phone to ring can rob you of the most fulfilling opportunities.
The joy of retirement is the freedom to do whatever you choose. For the first time, you don’t have other people telling you what to do. You don’t have those dreaded Zoom calls that you MUST attend. You no longer have to suffer through the commute, or that airport check-in line. The ball and chain have been broken, and you’re FREE!
With that freedom, however, comes an obligation.
In your working years, you could delegate tasks to others. You could work with others to develop your strategy. You could wait until your boss told you what to do. In retirement, however, YOU are responsible for establishing, pursuing, and achieving your dreams. No one is going to do it for you. If it doesn’t go well, you have no one to blame but yourself. You own this.
How To Avoid The Trap:
Once again, Trap #1 is relevant. Recognize before you retire that things are about to change dramatically, and start thinking about what you want your retirement to become. In my case, I started writing 3 years before I retired. I knew I was doing it as a trial, an experiment for something I may decide to pursue in retirement. It’s never too early to start exploring options outside your work environment. If you’re nervous about going solo, consider hiring a retirement coach. Form a Retirement Mastermind Group with a few friends. Reach out to an older colleague who’s been retired for a few years and offer to buy her lunch. Buy a few books on retirement, and spend your free time thinking about how you’re going to live in retirement. Follow your curiosity, and start doing as many trials and experiments as possible.
The future is out there.
It’s up to you to find it.
Conclusion
One thing worth noting is that none of these traps of retirement are related to money. As I’ve written before, it’s the “soft side” of retirement that catches people by surprise. Recognize that in addition to losing your paycheck, you’re also going to lose all of the non-financial benefits you currently receive from work. Folks I’ve talked to who suffer in retirement do so for reasons unrelated to money, and that reality is reiterated in the findings from this article in Harvard Business Review.
The best way to avoid these traps is to begin planning for retirement as early as possible, and include the non-financial aspects in your thinking. It’s been proven that the more time you spend planning, the lower your risk of falling into one of the traps.
Pay attention, this stuff matters. In summary:
The 7 Hidden Traps of Retirement:
- Focusing on who you are, instead of who you want to become.
- Focusing on too many options.
- Not building relationships outside of work.
- Waiting to figure out retirement until after you retire.
- Trying to apply your work behavior to life in retirement.
- Not focusing on creative endeavors to maximize your fulfillment.
- Not being proactive in making your retirement dreams happen.
Many folks have fallen into them and their retirements have suffered as a result.
Now that you’re aware of them, you can avoid suffering the same fate.
Retirement is coming.
Are you ready?