Emotional stages of retirement

Key Points

  • Since 2010, people are feeling less hopeful and optimistic about retirement.
  • The hesitation may be a result of economic anxiety.
  • Research shows retirees are more optimistic when they're working with a financial advisor.

Ameriprise Financial, in its first New Retirement Mindscape® study, revealed retirement to be a series of five emotional stages, instead of one event.

Five years later, the New Retirement Mindscape II® study shows a shift in the emotional stages.

What's changed? Economic and market turmoil has left people feeling less hopeful and optimistic about retirement.

  • Many experience a period of anxiety and hesitation a few years before retirement.
  • Many retirees realize that retirement may not always be an enjoyable liberation from everyday responsibilities.

Learn about the emotional stages so you can prepare and feel more confident about your own retirement.

The emotional stages of retirement

Emotional stage 1: Imagination (6 – 15 years before retirement)

About a decade before retiring, people begin imagining retirement, but it may not be a top priority if they have college-age children or aging parents.

People in this stage often save for retirement in both personal and employer-sponsored accounts.

However, many have not taken the time to figure out how much money they'll need to enjoy the retirement they imagine. Saving without a pre-determined goal often leaves them feeling unsure and unprepared.

Actions you can take:
Start thinking about when and how you want to retire. Determine how much you'll need and take a systematic approach to saving.

Emotional stage 2: Hesitation (Up to 3 – 5 years before retirement)

The hesitation stage is new to the 2010 study and is a result of the economic anxiety many people feel prior to retirement.

During this stage, people begin to more clearly visualize their retirement, causing them to question their preparedness. Economic stress intensifies these feelings of uncertainty.

However, people in this stage generally accept that retirement day is approaching, and often respond by seeking advice.

Actions you can take:
Maximize your retirement contributions and explore savings strategies.

Emotional stage 3: Anticipation (0 – 2 years before retirement)

Excitement about retirement builds during the anticipation stage. Most people have been preparing for retirement and are looking forward to it.

People in the Anticipation stage are most likely to feel "on track" for retirement, and more than half are working with a financial advisor.

Actions you can take:
Start planning for your income in retirement. Learn about solutions that can provide guaranteed retirement income.

Emotional Stage 4: Realization (Retirement Day and the year following)

The reality of retirement strikes people on or shortly after their retirement day.

  • In 2005, this stage was called "Liberation" because people were generally looking to fulfill retirement dreams.
  • However, the recession has muted this euphoria. Today, people often feel less empowered and adventurous, and worry more about having enough money to enjoy retirement.

Actions you can take:
Consider building a relationship with a financial advisor. Research shows retirees are more optimistic when they're working with a financial advisor.

Emotional Stage 5: Reorientation (2 – 15 years after retirement)

During the first year of retirement, most people adjust and find ways to manage any early feelings of disappointment.

In the Reorientation stage, comforting routines are in place, goals have been adjusted and happiness increases.

People who are working with a financial advisor and have set aside money in employer-sponsored retirement accounts and personal savings accounts generally feel more confident.

Actions you can take:
Assess the most common risks to your retirement and begin preparing for them.

Emotional Stage 6: Reconciliation (16 or more years after retirement)

As people get older, they begin to encounter illness and the loss of friends and family. They become more concerned about every day physical needs.

Many people continue to feel happy, yet feelings of anxiety and depression can start to creep in.

Actions you can take:
Plan for long-term health care expenses and for your estate.