Are You Afraid of Retirement?

Are You Afraid of Retirement?It’s been over 4 years since I started to immerse myself in the pursuit of retirement by blogging at Retire By 40. I sense there is a growing fear of retirement among the middle class which is somewhat puzzling to me. Retirement used to be something everyone looked forward to. It’s the time to put your feet up and relax after a long stressful career.  These days, it seems retirement is something many of us are forced into. If you’re not ready, then retirement could be devastating to your way of life.

Poverty in old age

Baby boomers are retiring in droves, but many of them aren’t quite ready for retirement. They have a long retirement ahead of them, though. The life expectancy in the USA rose to a record high 78.8 for babies born in 2012. For us older sets, a man can look forward to 18 years of retirement if he calls it quits at 65. A women has an extra 2 and a half years on average. That’s a long time in retirement and many retirees are not financially ready for it.

Recently, Fidelity reported that the average retirement fund balance of participants age 55+ are about $250,000. This might seems like a large amount, but can it really last 18+ years?

For simplicity, we’ll use the 4% safe withdrawal rule and take 4% from $250,000 every year. That’s just $10,000 per year! Hopefully, the average retiree will have access to Social Security. Okay, I looked it up and the average payout for retired workers in 2014 was about $1,300 per month. It seems the average retiree is in trouble if she doesn’t have a pension (which is getting rarer than a dodo). Her budget will be just $2,133 per month from Social Security and personal saving. That’s not much at all in Portland, but it might work in more affordable parts of the country. Still, I imagine many retirees will have to downgrade their lifestyle significantly to make ends meet.

The worrying thing about these numbers is that many retirees will probably withdraw too much at the beginning of their retirement. They are still healthy enough to go on various adventures which aren’t cheap. If they run down their personal saving, then they’d have to live solely on Social Security benefit. It’s not fun to be poor at any age, but it’d be especially tough when you’re 75.

Lack of purpose

Money isn’t the only reason why people are afraid of retirement. Even if they’ve saved diligently and amassed a comfortable nest egg, some people think their retirement years will be boring without the mental stimulation of work. I’ve heard many stories of depressed retirees and that’s not something to look forward to.

We all live ridiculously busy lives these days, but it will be tough to be backfill the 40-60 hours per week we spend working and commuting. Work takes up such a large part of our lives and it will leave an empty gap to fill when we retire. Your social circle will  shrink because your former coworkers will be too busy with their own lives.  Sure, it will be nice to relax for a while, but don’t let relaxation turn into boredom.

The real problem in retirement is the lack of purpose. When you’re working, you’re moving toward some goals every day. For many retirees, that’s no longer the case. You have to set your own goals when you’re retired and that’s tough for employees who have had a structured working life for 40 years.

Are you afraid of retirement?

Am I afraid of retirement? Not really. I’m very lucky to be able to leave my career when I was 38 and to become a stay at home dad/blogger. I’ll have 20 years to ease into full retirement. We should be fine financially because we live within our means and we saved diligently since we started working. Right now, I’m not bored at all because I have  3 year old kid to help make life interesting. I’m sure I’d find something fun to do on my own when he’s grown up. I’m embracing early retirement and it’s fantastic.

Retirement can be a difficult transition, but everyone has to retire at some point. It’s better to be prepared and walk out with your head high rather than be forced out the door, right?

Are you afraid of retirement?

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Joe started Retire by 40 in 2010 to figure out how to retire early. After 16 years of investing and saving, he achieved financial independence and retired at 38.

Passive income is the key to early retirement. This year, Joe is investing in commercial real estate with CrowdStreet. They have many projects across the USA so check them out!

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59 thoughts on “Are You Afraid of Retirement?”

  1. I think everyone likes the idea of retiring early, but maybe not the actual thing. Having a good retirement fund is hard to obtain, especially if someone did not start early and use compound interest and time on their side.

    But I personally think that if you did the correct steps ad your retirement fund is good, then retiring should be fun, and another amazing chapter in life that should be explored.

  2. If you are afraid of it, then as you mentioned those people don’t have a purpose or hobbies to do in the meantime. I would take the leap today if I had a massive stream of dividend income providing with 3,000 a month in income. Also for older poor retired persons, if they take advantage of elderly housing, it is usually based off a % of income, so with the rest of the 2100 minus say minimal housing expense, they can make it work. Also seniors have a ton of discounts for all types of entertainment. You can also babysit grandkids, and ask to be compensated if you are short.

  3. I’d just like to add a quick comment that may help to calm the fears of those who fear being bored in retirement. I’m still in my 50’s and have been retired almost 18 years. I’ve enjoyed most of the time and can’t remember ever really being bored. On the contrary, the days fly by. I can’t believe that it’s been so long already. I still love to travel, though cruises have gotten a bit stale. After awhile one cruise seems just like another and one ship like the others also.
    If anyone is worried about boredom and is still young enough, have another kid or 2.
    Kids can really be time consuming!!!

    • That’s great to hear. I don’t think I will be bored either. The days are way too busy for us right now. We don’t like cruises. It’s too boring for us. We like walking around and getting to know the culture.

  4. I’m not afraid of retirement, but wouldn’t really know what to do afterwards to occupy all the idle time. I can’t imagine constant travel or spending all the time with my family. My work is just work, but until I find something I enjoy working on immensely whether it’s another career or entrepreneurship, I’d rather work in the corporate world than goof off for 30 to 40 years.

  5. I just turned 30, so retirement for me is soon far away! But then again, I thought my 30s were so far away not too long ago 😉 I am trying to transition to something that I will enjoy doing for a long time, which is running businesses and investing. Being my own boss doesn’t seem like work to me, and hopefully my spouse and I will have a good amount saved/invested by the time we’re retired. Our passion is traveling, so I hope for both of us to be healthy (and wealthy) enough to travel the world when we retire.

  6. I was a little nervous with my first retirement at age 51 even with all the planning both financially and the non-financial aspects of retirement but that fear and nervousness quickly faded. My second retirement was worry and fear free. I am using the 4% withdrawal strategy. After working full time since age 18 without having taken more than a couple of weeks off at a time it just had to mess with my mind to not have a job and paycheck. Then all that planning kicked in and slapped some sense into me. It took about 4 weeks to feel totally comfortable with early retirement and to forgive myself for being a wuss about it.

  7. Was a big transition when I retired at 53. I really missed working and the people. But I also had lots of bucket list items I wanted to try. I have been a cyclist for more than 25 years, but when I was working, I mostly rode on weekends and holidays. Now I ride 40 – 60 miles, 4 or 5 times a week. I’ve found a huge group of riders my age and older than are avid cyclists and can keep a 16-18 mph pace. We are all young again and it’s so much fun. Definitely found the fountain of youth.

    • Wow, that’s great! Thanks for sharing. It’s really nice that you found a community after retiring. A lot of retirees struggle with that.

  8. Not afraid but not ready for it either. Money-wise it should be no problem because my total annual living expense excluding income taxes is less than 1% of net investments. It’s how to occupy the time that I haven’t cracked yet. Management reminds me that I’m very good at what I do and they’ve demonstrated what they think my value add to be by rearranging my job to let me do only the parts I enjoy. It was reaching financial independence that prompted me to pull the plug a couple of years ago, but those weeks of time off didn’t suit me, and management realized my exit leaves some major analytical exposures so we mutually agreed to postpone my departure.

    BTW I did try blogging during my brief foray into retirement and I actually ran out of ideas after my third essay. What you do seemed to me to be easy until I tried it myself, and frankly I’d say you work harder for your income than I do for mine (of course maybe I don’t have the knack for writing that you do so maybe it’s a draw).

    On your last line, while I’d agree with the preparation part, where I work it’s less profitable to quit than it is to get laid off because of the difference in severance. For those of us with decades of service the difference is substantial.

    • Thanks for sharing. The writing was tough when I first started. Like anything, I improve over time. It’s still not easy, but I’m managing. 🙂
      If you enjoy your work, then you definitely should stick with it. As for finding ways to spend your time, I don’t know. You might take some sabbaticals and try to figure something out. You’ll have to retire eventually. Hopefully, it will be easier when the time comes.

  9. I am not scared of retirement, but its also not something I think about that much. To me there is a difference between retirement and financial independence. I am certainly looking forward to financial independence, when I reach a point that working is optional.

    I honestly don’t ever see myself not working. Which in the U.S. it seems that most people look forward to the day they can stop working. Where I look forward to the day where I get to spend my time working on the things I find most important and valuable to me.

    Right now I find myself working part-time on my dream and full time on someone else’s dream. But I am taking all the steps to slowly buy back some of that time to shift the scales.


  10. Joe,

    I can’t say that I’m afraid of retirement at all. I took the leap from full-time traditional employment to writing for a living without a care or thought. But I did so because I was prepared. Having passive income working for you gives you options and flexibility. Those that are beholden to their job for a paycheck probably do fear retirement because they’ve never lived any other way and have less options.

    Building passive income not only provides you options, but it also gives you the opportunity to know what it’s like living off of a source of income other than a paycheck, which can be scary at first. Once you cross that hurdle, it becomes a lot easier. But you have to build that passive income to prepare yourself.

    Best regards!

  11. It’s natural to be apprehensive when wading into the unknown of retirement. (eg. financial unknown, health condition unknown, how to spend your new found time etc) but the reality is that every day you wake there are a wide range of unknowns to face…they just become routine unknowns so you become numb to them.

    but to be certain … the future…is … uncertain.. (anonymous)

    I think there is a great deal of natural inertia that happens as one reaches their 40’s and 50’s. Work and mobility options become limited due to age, health, economic realities (recession), and switching costs (more difficult to move a family of 4 with kids in school than a younger and single person). To succeed, one must put those aside and “go for it”….

    I’m apprehensive only because I feel a growing obligation to shoulder the burden for my aging (and financially insecure) mom. My sisters are not in financial position to cover the burden themselves, and even balk at the thought of doing their “financial fair share” to help mom financially when that time comes. So for me, with this burden in the back of my mind, it’s quite hard to pull the trigger and walk away from a good paying job when that additional (internal perhaps) pressure to help care for my loved ones exists.

    Sadly, I’m ready to FIRE now @ mid 40’s…. but the calculation did not include helping to care for aging and financially insecure parent. So perhaps One More Year… One More Year…

    All that said, those who have faced a health scare all agree they spent too much time at work and would jump at the chance to retire and spend their precious time doing things they WANTed to do versus HAD to do.

    • That’s a tough situation to be in. My parents are not financially secure either, but my brothers are willing to help shoulder the burden. Splitting it 3 ways make it much easier. We also don’t mind combining household. My mom can come live with us and it’s won’t be expensive to add another head to our household. The only problem is long term care, but we’ll cross that road when the time comes.

  12. I am 52 and my husband is 55. I would love to retire now, he would too. ????

    We have significant savings, but I worry that 10-13 years is a very long time to have to fund our own healthcare, in particular. I will be eligable to collect a small pension in 5 years, so I am inclined to try to hold on at least for this, but we are both pretty unhappy at work. There are days like even 5 years seems like forever. My pension should cover about a third of our living expenses, putting a bit less pressure on our savings to fund everything.

    We have been very focused on saving for retirement and paying off our house, which we did last month. I worry at bit that it may be hard to decide how much is truly enough?

    • Have you consider retiring one at a time? That way your health insurance will be covered by the working spouse. Having one person retired really make a big difference. The retired person can try to make life easier for the working spouse. 5 years is a long time, but it will gone before you know it. Good luck!

      • Yes, we have considered him retiring before me. He makes more money than I do, but I do make enough to cover our living expenses, especially without a mortgage payment. He is also older than I am. We could probably still save a little bit more, but not very much. I also have much better health coverage and he is already on my plan. I worry a little bit what would happen if I were to lose my job, but we have very solid reserves, so I am probably worrying about that too much. I do think I would expect him to help make my life a little easier if I were to hang in longer. Is that fair? You probably do more around the house than you wife does, don’t you? He is also not sure what he would do next, probably more afraid of retirement than I am in that respect.

  13. I retired a year ago, mid-50s. Oddly enough, I still feel like I’m decompressing. But no, I’m not afraid.

    I remain concerned on the financial front: not having money coming in is inherently worrisome. I therefore am spending a good deal of time reading financial stuff, tracking expenses, and considering options. But mostly I’m sticking with my original plan. Perhaps “vigilant” would be a better word than “concerned.”

    As to “purpose” issues – no, not worried at all. Right now I am thoroughly enjoying sitting on the back porch and reading, and occasionally tackling an item on a very long “to do” list. I have 30+ years of long hours, little vacation time, and much stress to make up for. When I tire of my back porch I will increase my volunteer activities and then will move on to travel, learning a new language, etc. There is always something new to tackle if you are so inclined. Mentally and physically I am much better off retired than continuing to work in the job that was no longer a good fit.

    • Thanks for the update. It sounds like you are doing quite well. I’m sure your finance is doing very well at the moment. The economy is humming along. The real test will be during the down years, right?

  14. Well, I’m definitely concerned about retirement, otherwise I wouldn’t be pushing so hard for financial freedom. But, because of that, I think we’ll be in ok shape financially.

    As for the psychological impact of retirement, I had concerns at some point about what to do with myself and I spent a long time thinking about options. But nothing concrete came of that exploration time. I now feel like it’s simply impossible (at least for me) to know what I’d do after FIRE and I don’t waste more time on it. Some things you just have to “go do it” to really learn and maybe FIRE is one of those things.

    I also think that sometimes people short-change the magnitude of the change. It’s not just quitting work, having fun, traveling, etc. Essentially, we need to mentally overcome the brainwashing we all get from work culture and find a new way of living.

  15. I don’t look at retirement from the traditional sense. To be retirement just means that I have options to decide what I want to do, rather than working for the sake of income. If I were to retire now I’d definitely have a handful of projects that I want to accomplish.

  16. I can think of worse things to be afraid of! I’ve never felt better, less tired, more healthy, fit, free than now in semi-retirement. Love my volunteer efforts, very rewarding. And I’m never, ever bored. Great to be able to take better care of the house and yard, too. Love exploring my area of the country, that I never had the time or energy for earlier.
    Read in a finance book that the distribution of your retirement savings is far more important than the accumulation of it. Agree.

  17. It took my in-laws a few years to ease into the idea of retirement. I think it was a few things. They did worry a bit about money, but also they were figuring out if they wanted to still contribute to the world through their paid work. They also wanted to feel useful and they didn’t want to feel old. When they looked at these concerns in a different way — they still can contribute to the world when not working in a paid job and they aren’t old if they retire — they were ready to take the step!

  18. I am definitely not afraid of retirement, I wish I could retire right now (or so I think). But retirement is so far away for me that I don’t really know what it will be like or how I will feel when it’s right around the corner.
    If I could retire right I would certainly wonder what I would do all day. I would likely want to work or volunteer part time but other than that I think I would be fine entertaining myself everyday.

  19. I’m not afraid of early retirement or full age retirement for that matter. I had a passion for the medical field as a small child. Healing people has some mystic power to it. 😛 as I grow up and emerge myself in the profession itself. It has gotten become more depressed. (All the drugs and treatment out there are only to treat the symptoms, or temporary control the disease – Diabetes, hypertension, congestive heart failure, COPD. The america society as general has set the lifestyle standard for the rest of the world, look at China, Thailand, and Vietnam. These third world countries have the thirst for our technologies and food and lifestyles (Starbuck drink average 560 calories, and the people in these countries absolutely love them, where as before they’d just drink water or tea). When they get there, they’ll just equally as fat as sick. 50% of American are overweight or obese. Anyhow, our society is not set out to do as much preventative therapy or develop a true CURE to our chronic health problems.)

    However, I still have the healing passion (I’m contemplating going part-time or continue to work for 2 more years), but I still want to learn other things such as dance, music, drawing, writing, traveling and seeing the world. I’d much rather aging gracefully, rather than continuing indulge myself with a stressful job full-time. I’ll never truly retired. I can’t sitting there and wait to die without doing something meaningful and living life.

  20. Not afraid, but very knowledgeable about myself. I need to keep busy and if I don’t keep busy with my job, I will probably get into trouble. According to firecalc, we could keep going for about 12 years on our current savings and spending levels under any historical scenario without making another dollar from earned income. It’s possible we could go a lot longer if we got lucky. But we don’t want to. DH spent this weekend working not because he has to but because he gets enjoyment out of solving programming problems.

    I don’t think I should have to want to retire early either. I mean, why bother trying to figure out what to do all day when I already have something worthwhile to do all day?

    It probably helps that what DH does for work literally saves lives and what I do is intellectually stimulating and I get to pick what topics I work on. Doing research for a job is like what a lot of people wish they could do for retirement. Except we get paid!

  21. My husband and I talk about retiring early. We haven’t put a hard deadline but we would love to be retired by the time we hit 40. This doesn’t mean stopping work. Actually, we would still work but in our endeavors. We just don’t want to be tied down to a job. Many things can happen from now and then. In particular I worry about my parents. They have no retirement plan. They were immigrants and never had access to a retirement plan. So their retirement and expenses will fall on myself and my brother.

  22. Heck no! There are obviously major hurdles to overcome as you mention. The financial aspects (“do you have enough”) and the psychological aspects (“what will you do all day?”). Tackle those and you’re golden.

    Easier said than done, right?

    I think a lot of people get comfortable in one spot. They don’t want to switch jobs or move to a new city. So they sort of stagnate. Not that they suffer, they just don’t grow. Making the leap into retirement can be scary from that point of view. But what’s the alternative? Stagnation?

    • Change can be difficult. It’s so much easier to stay the same. I wouldn’t say stagnate. People just don’t like changes.

  23. Well, I’m afraid of retirement if it’s going to be like one set of our parents (went through their money too quickly and now they live on SS). The other set of parents, well, it was a difficult life change, but my Dad is in his 70’s after 15 years of retirement and still living well. So, I suppose you could say, I have a healthy respect for what it takes to make a retirement the best that it can be and am content working a little longer for that peace and security. 45 years old is my perfect plan, if real life doesn’t intervene 🙂

    • Thanks for sharing. Good luck with 45. I’m sure real life would intervene, though. 🙂
      Withdrawing too quickly definitely is a big problem. Everyone need to watch their withdrawal rate in retirement. It’s better to work part time and withdraw less when you’re still able to.

  24. Nice topic and article!

    I am “apprehensive” rather than scared (at this time :-)) about a few aspects of early retirement and a couple in real retirement.

    Early Retirement (planned for 50-70yrs)
    + Medical costs…most expenses can be scaled down, but not this.
    + Having a paid off house

    Real Retirement(70+)
    + Medical costs.
    + Being alone…mentally and physically.
    + Becoming dependent on somebody or something.
    + Running out of money
    + Have I taken care of all obligations towards my family?

    • Thanks for sharing your thought. Medical cost is a big problem for early retirees. If you’re flexible, maybe you can live in another country with more affordable healthcare like Thailand or Costa Rica. 70+ is another question. At that point, it’s all depends on how healthy you are.

  25. I have been semi-retired since middle of last year at age 50 and loving every minute of it. I have used the gift of time to pursue a physically active lifestyle as well as to make new friends and nurture existing relationships. My career was so demanding that I was unable to do so before. I am very happy and find that I don’t need the perks and the title of a high level corporate job to be fulfilled. I am also looking forward to volunteer opportunities within my community.

    • Congratulation! That’s a great story to hear. It sounds like you are living the life you want instead of following a path that someone else define for you. I really enjoy hearing about early retirement successes. Thanks for sharing.

  26. I’m not scared one bit. In fact I’m ecstatic for that day to arrive. One major factor is that those of us that work towards retirement at an early age (our goal 40 for Mr. Maroon and 37 for me) is that we know of so many things that will occupy our time. Namely children at home. Plus plenty of projects (my list grows every day) and ‘work’ for fun. Compared to those who have worked for 40 years, we have not let a career define our life. So we won’t lose as much of our identity when we walk away. From an emotional standpoint, I think that really works in our favor.

    • It’s a huge advantage to have. It’s much easier to make a gradual transition as we get older. We’ll work for fun for 20 more years and then ramp it down slowly at our own pace.
      We also live within our means and won’t have an erupt drop in income. Normal middle class people spend way too much money.

  27. Yes, I am definitely in the category of being “hesitant” rather than “afraid” of retiring. I just let go a ‘retirement option’ in Dec’2014 which including over $100K in the package. More than money and activity, for me it is health care, and the unknowns that we have to deal with when it comes to health care. On the top of it, the ‘golden shackles’ of a six figure salary that is associated with the job, perks of expense accounts, free phone/connectivity, tolls/mileage etc are huge elements (even though it might total to only $1000 per month) to give up and walk away.

    My assets are plenty to last my lifetime, and leave enough for the kids. Plus I have a six figure income in rental properties (paid off), and a passion for Day Trading and Swing Trading.

    But, still, pulling the “trigger” to walk away from a career, is really a HARD DECISION. Kudos to you for making it happen at a young age. I have read all of your web blogs and many others on the retirement topic, and yet, you have struck a nerve with your topic today, since with all of the supporting structure ready to go, I am unable to pull the trigger.


    • Thank you for sharing your thought. I’m sure you will be ready at some point. Maybe you can make it a gradual transition. Take a 3 months sabbatical and see how you feel about it. It sounds like you’re set financially so it’s all mental at this point. You might not even like being idle so working longer could be the right option for you. Good luck!

  28. I guess it depends on your definition of retirement. If we go with the dictionary definition of retirement – stopping work all together – then yes, I am afraid. I don’t want to run out of things to do. But, if retirement means continuing to work, not because you have to, but because you love to, then I am not afraid. I’m excited. I’ll probably be logging 40+ hours a week doing something I love well beyond age 65.

  29. I’m a stay at home mom, so I’m not afraid of leaving work! We’re young, but we have a plan. I know life happens and things get in the way, but also no surprise that life happens, retirement doesn’t sneak up on you!

    • Actually, I heard it’s pretty tough for stay at home parents to retire. Your spouse will demand a lot more of your time and it can be a huge adjustment period. Read up on it. 🙂

  30. I have a lot of different feelings when it comes to retirement. At this point I can’t wait to reach financial freedom. However, like many others, I am somewhat concerned with having enough money. Each additional year I work adds considerable financial security to the bottom line. I have six years until I reach retirement at 58. I have tracked my expenses for over a year, and I will be comfortable covering my living costs and any emergencies. I have hobbies to keep me busy, but I do worry about planning my day. In addition, I cannot stay in my current home due to very high property taxes (I need to downsize). That leaves many unanswered questions when it comes to where to move and what type of home to I want (condo, townhouse or single family home). It’s exciting, but I have a lot to consider and work out to ensure success. I appreciate articles such as yours to guide the way. Thanks!

    • Wow, what an exciting and busy time for you. Maybe you can try to set things up ahead of time. Figure out what type of home would work better for you and work with the housing market. Maybe sell your current home at the height of the market and rent for a few years? There is bound to be a correction at some point.

  31. I’m not afraid of retirement. For one I believe I still have time to secure a good retirement plan, and due to my military career I will have residual income for the rest of my life.

    Having purpose at that age is very important for if you sit around and do nothing you will waste away.

  32. I’m not afraid of retirement because I don’t look at it in the traditional sense. It’s not a time to never work and just relax. I’ll probably still be working in retirement, just not 40 hours. I will be doing something I love, that gives me purpose. That makes me excited for retirement.

    Also, I’m glad I’ve read all the things I have on personal finance. I know how much we need for a safe, healthy retirement. It’s a good amount of money, but I’d rather have more than run out and live broke for who knows how long in retirement.

    • I like working part time in retirement as well. We need some purpose and a little work can help in that department. Right now I’m working about 25 hours/week. When we fully retire, I expect to work maybe 10 hours per week.

  33. Am I afraid of retirement?

    Not at all given that I have been semi-retired for the last 25 years since I was 40. Now that I am 65, I consider myself fully retired.

    The thing that I would be afraid of is having to go to work in a corporate or government job. In fact, I wouldn’t consider it for a nano-second even if I was offered $1 billion to go to work for only one year.

    This I am very clear about: Trying to work for a year in a regular job could easily kill me. Retirement for 20 or 30 or 40 years won’t.

    Ernie J. Zelinski
    The Prosperity Guy
    “Helping Adventurous Souls Live Prosperous and Free”
    Author of the Bestseller “How to Retire Happy, Wild, and Free”
    (Over 250,000 copies sold and published in 9 languages)
    and the International Bestseller “The Joy of Not Working”
    (Over 275,000 copies sold and published in 17 languages)

    • Hmmm… I probably would go back to work for a year if I was offered a billion dollars. I still have a price. 🙂
      It’s great that you know yourself so well.


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