After years of work, you’ve retired, meaning a different lifestyle and different financial requirements. We explore the financial behaviors you might need to change.

by Gary Foreman

Retirement. After 40 or 50 years of work, now your time will be filled with other pursuits. That means a different lifestyle and different financial needs and requirements. So, what financial behaviors will you need to change when you’re retired?

To help us answer that question, we spoke with Reeta Wolfsohn, CMSW. She is the creator of Financial Social Work, an online financial support group for women. All of Reeta’s work focuses on Financial Wellness and helps men and women to create sustainable, long-term financial behavioral change. We asked her the following questions.

Q. What financial behavioral changes do recent retirees need to make?

Ms. Wolfsohn: Preparing for retirement is a process that should begin in advance of the actual retirement date. The first step of this process is to know your monthly income and your monthly expenses in advance so you are aware of any lifestyle changes (smaller living space, reduce food costs, etc.) that may be required.

Part of this process includes identifying what it is you most look forward to about retirement. Making such a list will help you to focus in on the positive aspects of no longer having to go to work every day.

Some of the actions and activities on that list will have a cost to them. Those costs need to be part of the list so you are clear on which items are most affordable and which will need greater planning.

Another important step is to acknowledge any parts of work life you might miss or any areas of retirement you find less appealing. This will help you to be more prepared for your actual retirement.

Q. Which changes are the hardest to make? And why?

Ms. Wolfsohn: Change is often challenging even when it is something as anticipated as retirement. Again, the earlier you begin planning for retirement the more prepared you are likely to be for it.

Some retirees are surprised to discover they actually miss work and/or the camaraderie of colleagues. Others miss the routine they have been part of for so long.

It is helpful to think of retirement in terms of an adventure because you are setting out on an unknown journey. There is no way to fully understand what to expect from life as a retiree. Be patient and kind to yourself as you experience the positive and the negative feelings of this new phase of your life.

If things go better than you expected, you have much to celebrate and be thankful for. If retirement isn’t what you had thought it would be, be open to learning how to adjust to its reality and willing to give yourself the time to discover how to adapt to what awaits you.

Q. Can retirees learn new ways to relate to their finances?

Ms. Wolfsohn: Everyone can learn new skills and tools at every stage of life if they want to. Finance is a significant component of all retirement planning and should be explored and understood before retiring. Traditionally, retirement includes a reduction in income; it necessitates changes in financial behavior.

When the dollars and cents of retirement are laid out on paper, it is easy to see the specific financial choices available in retirement. If lifestyle changes are required, it is helpful to recognize them, as the tradeoff is no longer going to work.

Q. What’s the financial change that retirees are most likely to miss?

Ms. Wolfsohn: Since everyone is different, there is no one size fits all list of what a retiree might miss as a result of a reduction in income. You may miss being able to spend on certain items and participate in certain activities from the workforce period in your life. However, that is not necessarily a given.

In retirement, your daily routine will be different and the things you did and bought while working will no longer be appropriate in your new environment or situation. If there are things you miss, it is okay to acknowledge their absence, but it is important not to dwell on them.

Q. What’s the upside to making appropriate behavioral changes?

Ms. Wolfsohn – Sustainable, long-term financial behavioral change is a requirement of retirement. A successful retirement depends on financial stability. Building or paying off debt during retirement adds unwanted stress and pressure and limits the scope of this part of the life cycle.

Retirement is money driven. It is wise to eliminate debt and understand the financial basics of your retirement before making the decision to retire.

Q. How can retirees determine whether they need professional help to make necessary financial behavior changes?

Ms. Wolfsohn: If you are retired and have debt you are trying to pay off, or find yourself increasing your debt, you may want to consider seeking help with your finances. With more leisure time, spending can become a problem. More time with a partner or spouse can also lead to increased arguments about money. Help is available if you need it.

With approximately 10,000 people reaching retirement age each day, many of us will be considering what financial behaviors we’ll need to change as we begin a new lifestyle.

• Managing and Using Credit Cards in Retirement
• Creating a Side Income in Retirement
• How Retirees Can Live on a Tight Budget
• Your Emergency Fund in Retirement: A Comprehensive Guide

Reviewed April 2024

About the Author

Gary Foreman is the former owner and editor of the After50Finances.com website and newsletters in 1996. He's the author of How to Conquer Debt No Matter How Much You Have and he's been featured in MSN Money, Yahoo Finance, Fox Business, The Nightly Business Report, US News Money, Credit.com and CreditCards.com.