- Many retirees who have saved enough money still find themselves unhappy.
- Researchers say emotional, physical and social factors are as important as fiscal ones in retirees' golden years.
- Merrill Lynch found 47 percent of retirees work or plan to in retirement, as do 72 percent of pre-retirees age 50 or older.
For many retirees, saving enough for their golden years is only part of the formula for a good retirement.
Financial advisors frequently see retirees who worked hard and socked away enough money to fund their nonworking days, only to discover in retirement that, well, they're unhappy.
"People who identified very strongly with their work have a harder time with the transition to retirement," said certified financial planner Michelle Fait, founder of Satori Financial. "For some people, work was just a means to an end, but for those whose self-identity and satisfaction came from their work, it's difficult."
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."
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.
For other clients, advisors recommend they explore their charitable side. For example, a Satori Financial client who had spent his career as an engineer turned his charitable inclinations into scheduled work at a local food bank, according to Fait.
One of the risks of muddling through retirement with no plans to fill your days is simple loneliness, advisors say.
"Sure, you might live in a neighborhood, but your neighbors have lives and are busy," said Kathryn Hauer, a CFP with Wilson David Investment Advisors. "So unless you move to a retirement community, the concern is about simply having people to talk to."
Retirement communities are a booming business — they collectively boast $63 billion in revenue, according to IBISWorld — but they aren't cheap. On top of requiring an up-front entrance fee that typically reaches into six figures, there are continuing monthly costs that can run a few thousand dollars a month, depending on location and level of services.
But if you can afford the entry fee — often funded by the sale of your home — and you can show you have additional resources to pay the monthly fees, retirement communities are one way to guard against isolation.
Another tricky thing for some people is adjusting to the end of a paycheck.
"When you shift from saving to spending, it can be hard for some people," said Fait at Satori Financial. "That's where planning really helps.
"They can look at the plan and see that they can afford to spend money on somethin and that it's [a self-imposed, emotional] constraint, not a financial constraint."
Advisors also say it's important to make sure you and your spouse are on the same page when it comes to how you'll spend your time.
"Retirement can be very stressful on couples," Fait said. "With some, women never 'retire' from their household responsibilities, so the prospect of … time free from drudgery might only be true for half of the couple."
Fait also warns that being in each other's company all the time also can require some adjustments.
Additionally, advisors recommend giving a retirement idea a test-run before committing to it. For example, before you move to your dream vacation spot, make sure you experience an extended stay there before picking up and moving there.
While seeking help from a financial advisor for problems relating to self-worth and happiness in retirement might seem better suited for a psychologist, many of these financial pros enjoy that part of their job.
"It's part of what clients need help with," Fait said. "My work isn't just about spitting out a financial part.
"That's the easy part."
— By Sarah O'Brien, special to CNBC.com