Retirement anxiety - and 4 tips to overcome it

A look at the growing trend of retirement anxiety and how you can overcome it.

We’re often sold the retirement dream – the world as your oyster, the permanent holiday. But research carried out by abrdn has revealed that a growing number of people, rather than looking forward to retirement, are experiencing feelings of anxiety at the prospect - fuelled by both emotional and financial concerns. Let’s take a look at the drivers behind these concerns and what practical things you can do to help overcome retirement anxiety.

Retirement anxiety is a growing trend

Retirement anxiety is an emotion of concern or worry, experienced by people yet to retire, about the prospect of retirement. Examples include concerns about how they’ll fill their time, financial worries and feeling a loss of identity. And as abrdn’s recent research has highlighted, it’s a significant and growing issue.

More than half of UK adults aged 40 years+ who we spoke to are anxious about retiring, with both emotional and financial drivers cited. And almost one in five say they’re planning to delay retirement due to anxiety.

• 58% attribute their anxiety to not having saved enough money throughout their lifetime
• 57% blame the cost-of-living crisis for their anxiety
• 45% cite worries about the current economy, and its impact on investments and pensions
• 20% are worried about being pigeonholed as old
• 17% are concerned about losing their identity when they stop work.

Planning for retirement is now regarded as a ‘stressful life event’, ranked more stressful than divorce by the 40-44 age group.

Indeed, the research has also revealed that almost one in 10 have sought medical help for their retirement worries, while 16% said that feeling anxious about retirement has kept them up at night. In addition, 13% say that their personal life and relationships have been impacted, while 14% say that it’s affected their work.

Another factor in the increase in retirement anxiety is people’s concern about their lack of planning. More than a fifth say they’re embarrassed about their lack of planning, and 15% are nervous about getting advice.

If you find yourself affected by any of these worries, know that help is out there. abrdn offer a free, no-obligation retirement planning call.

Book your call in less than 5 minutes today and find out how they could help you minimise stress when planning your retirement.

What the experts say

Dr Linda Papadopoulos, a leading psychologist, urges people to open up about retirement anxiety and face it head on: “The key to conquering any stressor is to address the issue by first acknowledging it, and then seeking constructive and informed support to deal with it. Retiring is one of those big steps we know we’ll take at some point in our lives and we can reduce the risk of ‘retirement anxiety’ by starting to prepare as early as possible.”

Meanwhile, Colin Dyer, financial planning expert at abrdn, highlights the benefits of planning and getting professional help: “It’s clear that this growth in retirement anxiety is being fuelled by the cost-of-living crisis and worries about the economic landscape. We are seeing more and more of this every day with our clients. Planning for retirement early can help alleviate worries and anxiety, and people shouldn’t be embarrassed to raise issues they are not sure or are concerned about – it’s OK not to know. There can be significant benefits to seeking advice from a professional adviser in order to get a clearer understanding of income and savings, and how to best prepare for this important life stage.”

Practical steps you can take to help overcome retirement anxiety

1) Understand how much money you have and what you’ll need

Many people think of their pension and the state pension as their only sources of retirement income. But don’t forget about ISAs, other savings and investments, or rental income from any property you let out. You may have more than you think.

2) Think about continuing to work in some capacity

If you don’t feel financially or emotionally ready to retire, have you thought about flexi-retirement? This basically means continuing to work in some form, while taking an income from pensions, savings or the state pension to make up your total income. And it’s a trend that’s growing in popularity. A total of 66% of retirees interviewed as part of abrdn’s Class of 2022 retirement report said they planned to do some form of work in retirement.

For example, you could stay with your current company and reduce your hours, you could get a new part-time job, or you could even start your own business.

3) Take advantage of help and support

Don’t feel that you’re alone – there’s a lot of great free information and support available that may help to alleviate some of your concerns.

The MoneyHelper website is a free and impartial source of guidance on pensions and retirement, including phone and online support from their team of pension experts.

4) Think about getting professional financial advice

Getting financial advice can help you go into retirement feeling prepared and confident that you’re making the right decisions. A financial adviser can help you work out what you want out of retirement and how you can make that a reality.

ii/interactive investor joined abrdn in May 2022, which means it benefits from being part of a global investment business that helps customers plan, save and invest for their future.

abrdn offers a wide range of financial advice and planning services. Find out how abrdn’s financial planning and advice services could help you with retirement planning. Book your free, no-obligation call today.

The information in this blog should not be regarded as financial advice. If you’re in any doubt about your options, you may wish to speak to a financial adviser. There will likely be a cost for this. All information is based on our understanding in April 2023.