PERSONAL FINANCE: Tips for when you're coming up to retirement

Many people can be thrown into disarray at retirement
Many people can be thrown into disarray at retirement Many people can be thrown into disarray at retirement

FOR many of us the ‘coming up to retirement’ has many stress points to it. It is filled with many financial questions, but the emotional ones are those that can paralyse us, and we really need to pay attention to those, long before retirement. The same applies with having to finish work early, let alone sports people having to retire early through injury.

The nine emotional needs we need to consider are well known to psychologists, but just think about how these are met before retirement and how they will be met after, and also know that just one of them not being met can ensure we suffer significant distress, and even mental paralysis and procrastination.

When these needs are not met healthily, we can try to meet them in varied unhealthy ways through compensation and that can be painful and expensive.

Those nine emotional needs are:

  •  Security - safe territory and an environment which allows us to develop fully;
  • Attention (to give and receive it) - a form of nutrition;
  • Sense of autonomy and control - having volition to make responsible choices;
  •  Emotional intimacy - to know that at least one person accepts us totally for who we are, “warts 'n' all”;
  •  Feeling part of a wider community;
  • Privacy - opportunity to reflect and consolidate experience and not think;
  •  Sense of status within social groupings;
  •  Sense of competence and achievement;
  •  Meaning and purpose which comes from being stretched in what we do and think.

The finances will come second to that, and if these needs are well thought through, ‘how will I have them met in retirement?’, it will clear your mind to look at how you will take care of bigger decisions in life. Financial decisions made with emotions, tend to be emotional decisions, not financial decisions.

We can be thrown into disarray at retirement. Consider some of the above needs.

Our job normally gives us a meaning and purpose and stretches us. Our sense of status in social groupings is gone completely. ‘I’m Susan the nurse’, is now I’m Susan who used to be a nurse. John the footballer is now an ex-footballer. Bill the bar owner is just Bill. These can have dramatic emotional impacts on us as that status needs to be fulfilled elsewhere.

Our ‘sense of community’ is jolted as we may currently socialise with the staff we work with outside of work. They will all now meet after work for a meal, drink or Christmas party, whereas you don’t, instead watching on social media, how that community you were a part of, has disappeared.

Attention, the need to give and receive it. The bar man who had a full audience to look after and who also looked up to him, is now on the other side of the bar. The nurse no longer has that need of giving attention and seeing the smile of gratitude come back.

Security – will I be able to pay my bills?

Privacy – you will have too much of it, unless your partner retires at the same time as you, in which case you might want the privacy more!

A sense of competence and achievement diminishes after the first few months when you realise you are down to really cutting the grass with scissors to make it look uniform and you have now bought a new pressure washer - to pressure wash your two-month-old pressure washer.

This is often the case why people don’t retire, saying they wouldn’t know what to do with themselves, when, in reality, there is much outside of work, and they probably just haven’t got a full handle on their finances and these needs to give them that perspective.

So, as early as is possible you need to be looking at what will fulfil these needs and create a plan to consider how they will be met, and what the finances are to fulfil them. (Consider these needs also for the person threatened with redundancy).

Over the coming weeks I’ll cover the subject of retirement in detail, and of course, if you have a query, you want covered, let me know.

Retirement should be a glorious thing, a time to fulfil all that you couldn’t before because of time, and I’ll do my utmost to ensure I cover the money side so you can.

:: Peter McGahan is chief executive of independent financial adviser Worldwide Financial Planning, which is authorised and regulated by the Financial Conduct Authority. If you have a financial query, call Darren McKeever on 028 6863 2692, email or visit