Loneliness and depression among older people have been correlated with a decline in physical health, according to various studies, with possible effects ranging from cognitive decline to negative cardiac implications. Additionally, a 2013 British study showed that retirement increases the risk of depression by 40 percent.
Nevertheless, for many of the roughly 10,000 Americans who retire every day, planning for the psychological impact of such a major life change tends to be overlooked.
"For some of us, while we're pouring our heart into work ... we don't have time or energy to think about it," said CFP Nancy Nelson. "Then, when we retire, it can feel something like falling off a cliff."
Nelson retired in 2012 by selling her advisory firm and now works with retirees via her coaching business, Beyond Enough, to help them have a fulfilling retirement. But it was decades ago that she realized the so-called soft side of retirement planning was as important as the financial component.
One of Nelson's early clients had reached retirement with enough money. She felt both professional satisfaction and happiness for the client … until he told her he didn't have friends outside of work.
"He said, 'Last week I had the flu, and the only people who knew I was sick were my co-workers,'" Nelson said. "That was the first inkling I had that retirement planning isn't just about the money."
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The challenge for many retirees, advisors say, is to replace the benefits that work delivered: a sense of identity, a daily structure and a social circle.
For some retirees, the solution is to turn their expertise into part-time work, such as consulting. While working in retirement once was unusual, a 2016 Merrill Lynch study showed that 47 percent of retirees either have worked or plan to work in retirement, and 72 percent of pre-retirees age 50 or older say they want to work in retirement. For some the reasons are financial. For others it's a way to remain professionally pertinent.
"Part-time work is ideal if you can do it," Nelson said. "That's a great step for a lot of people.
"It's more of a glide path to retirement."
Some people eschew work and choose instead to focus on a preexisting hobby or passion, or they end up discovering a new one.
In the case of Nelson's early-career client who lacked non-workplace friends, he decided to embrace a hobby by hitting the road. "He found a group that did RV trips, so he met people who shared his interest," Nelson said.