10 Retirement Rites of Passage | Retirement

Few things in life can compete with the significance of retirement. After decades of working day in and day out, this is when you get to reclaim your time for yourself.

“This is (one of) the largest transitions folks will make in their lifetimes,” says Shanna Tingom, financial advisor and co-founder of Heritage Financial Strategies in Gilbert, Arizona. “It’s a lot more emotional than people think.”

As you move through the retirement process, you can expect to go through most, if not all, of the following rites of passage.

At some point, people realize that, yes, they can retire. Perhaps they are one of the fortunate few with a pension, and they have fulfilled the required years of service. Or maybe they run the numbers and discover their retirement savings can cover their bills.

Don’t jump to conclusions though. “Before you retire, you want to have a comprehensive financial plan that will outline how you’ll replace that income,” says Kenneth Chavis IV, a senior wealth counselor with Versant Capital Management in Phoenix.

Once you know you’re ready to retire, it’s time to inform your boss. Depending on your role in the company, you might need to have multiple conversations with your employer to iron out the details, according to Chavis.

“You’ll have a timeline on when you’d retire,” he explains. For instance, your boss might ask you to stay until a project is complete or your replacements are trained. Extra financial incentives may be offered to encourage you to wait until these tasks are done before you head out the door.

The time will come when you sign out of your workstation for the very last time. Before doing so, double-check to ensure you haven’t left any personal or important files behind.

Also, check with your supervisor or human resources office about how to turn in any equipment you may have at home.

Depending on your relationship with your co-workers, saying goodbye to them could be cause for joy or sorrow. After many years together, colleagues can often feel like family, and a farewell party is a rite of passage for many retirees.

Retirement doesn’t mean you have to lose touch with co-workers though. Exchange contact information and schedule a monthly coffee, drinks or dinner date to catch up with your former officemates.

Picture this: It’s a workday, but you get to sleep in as late as you want. There is no need to set the alarm, scramble to find breakfast or brave the rush hour commute. You will be able to wake up on your own with the whole day stretching before you and nothing that has to be done.

It’s a milestone day, and one you should fully enjoy. However, the novelty of lazy days might soon wear off, so it’s good to have a plan for how you expect to spend your time going forward.

Asking someone what they do for a living is a common way to make small talk, but you won’t be able to answer with your job anymore. That might be disconcerting for some people.

“For a lot of people, their identity is very much tied to their jobs,” says Frank Legan, partner with financial planning firm Cedar Brook Group in Cleveland.

Before you get hit with this rite of passage, consider how you will respond. Will it feel good to share that you are retired? Or would you rather talk about how you fill your time now? For instance, you could mention a favorite hobby or volunteer activity as “what you do.”

Another unsettling aspect of retirement for some people can be the thought that they will not get a paycheck again. Instead, they will need to rely on their savings, Social Security or retirement benefits to make ends meet.

While switching over to disbursements from retirement funds can seem like a big change, it doesn’t have to be. “You can set up automatic withdrawals so it’s like a retirement paycheck,” Legan says.

Disbursements can be scheduled to arrive monthly, quarterly, annually or on another schedule you stipulate. Talk to your financial planner or plan administrator for details on how to set up payments.

The full retirement age for Social Security has been gradually climbing from age 65 to 67. However, the eligibility age for Medicare hasn’t changed.

“Just like at age 18 you sign up for the draft, at age 65, you sign up for Medicare,” says Kelly Gilbert, a fiduciary investment advisor at EFG Financial in Grand Rapids, Michigan.

If you fail to sign-up for Medicare when you are eligible, you could find yourself paying late enrollment penalties.

Penalties aren’t assessed if you had health insurance through an employer at age 65, but if you retire early, be sure to apply for Medicare on time.

Most retirees will also file for Social Security benefits at some point. “That’s a nice rite of passage for retirees,” Gilbert says with sarcasm, noting that the program can be confusing for many people.

Employees of the Social Security Administration aren’t allowed to provide advice, which means retirees won’t get any help from them in understanding the pros and cons of filing at different times. Since when you file can greatly influence how much you receive each month, talk to a retirement planner who has experience with Social Security for assistance in weighing your options.

Travel is a top priority for many retirees, and you shouldn’t wait long to take your first trip.

“A month after your retirement date, plan a trip,” Tingom suggests. It could be anything from visiting the grandkids to going on a cruise. “That gives you something to look forward to.”

Some people may feel rudderless after leaving their jobs if they don’t have any activities planned. Scheduling a trip is just one way to avoid moving through your retirement on autopilot. Then, when you get back, you will hopefully feel motivated and energized to plan a whole slew of new milestones to hit during your next chapter of life.