The retirement grace period

The decision to retire is a difficult one and must take many factors into consideration. After all, it's a significant life change that could have a major financial (and emotional) impact. For that reason, many people are nervous that they will get it wrong and retire at an unfavorable time. And, when the inevitable difficulty of that transition becomes a reality, it’s normal to feel like you made a mistake. Whether you’re preparing for retirement or are newly retired and wondering if you made the right decision, let me introduce you to a concept that I call “The Retirement Grace Period.”

A grace period is usually a time immediately after a major purchase or decision when we have the option for a "do-over." With retirement, you may or may not have that luxury. When it comes to The Retirement Grace Period, think instead about giving yourself the grace to move through this life transition without expecting perfection.

The challenges of transitioning

Major life transitions are hard. Think about going from single to married, from no kids to being a parent, for example. These shifts were complicated, imperfect and full of trial and error. Regardless of your preparation, there was a lot of "figuring it out as you go" with these life changes. Retirement has a similar transition experience. For most, work life has dominated 30+ years of their lives. Suddenly, it is no longer the center. And it's not just the work itself. Your source of income, social network, calendar, home life, etc., all change to some extent, not to mention the potential impact on your identity, purpose and ambition. Yet, many believe the preparation for this transition is primarily about dollars and cents, and are shocked when they struggle with the change.

The Retirement Grace Period is the time between your retirement date and the day you reach what we'll call a “new normal.” Susan Bradley of The Financial Transitionist Institute talks about the new normal this way:

"People are in a state of flow. They are energized and live their lives with a sense of comfort and predictability. They have a fresh appreciation for what it means to have completed a major life transition and have the confidence to thrive when life changes again."1

What a great goal to have! Before you get there, you’ll experience the natural impact of change, which is often messy and full of surprises. One of the ways that you can give yourself some grace is in your spending habits. Most new retirees can't believe how much everything suddenly costs. Your spending likely seems very different when it's coming out of your assets instead of a paycheck. We spend most of our lives building wealth, and it can be emotionally challenging in retirement to draw from it and watch your wealth gradually decline.

You’ll need to give yourself time to get used to what your regular spending truly is. You may also find that you are spending more money early in retirement because you're checking off many items on the “bucket list” that you've been compiling for many years. Know that this may be the case for you, and plan accordingly.

Finding your stride in retirement

Allow yourself some grace in how you spend your time. It may take a while to get into a healthy routine. Many retirees suddenly find themselves too busy because they’re not used to idle time and want to feel productive. They are saying "Yes" to every demand for their time and attention. Retirement should be a time of autonomy, agency and freedom. Don't allow yourself to become enslaved to a calendar that does not reflect your goals and priorities. This will take some time and experimentation to get right.

Deciding to retire can feel risky. Many people want to try to get it perfectly right, but it’s virtually impossible to achieve the perfect retirement, so don’t fret over it! There will always be something that doesn’t go according to plan and is not part of the idyllic retirement commercial you see on TV. There may be adjustments that you need to make, whether it is in your financial plan, how you spend your time, or where you find purpose and fulfillment. Give yourself the grace to figure it out.




Charlie Jordan, CPA, CFP, CeFT

Charlie Jordan, CPA, CFP, CeFT

Partner, Wealth Advisor

Charlie is a Partner and the Practice Area Leader of Retiring Well with CI Brightworth Private Wealth. Retiring Well is a new conversation on the familiar story of retirement; integrating the technical and personal sides of money. He is the host of the Retiring Well Podcast, a twice monthly conversation about life in retirement and how your money can be used to improve your life. Charlie is a CPA, CFP® practitioner and a Certified Financial Transitionist (CeFT). He is a graduate of the University of Florida and received a Masters in Accountancy from Kennesaw State University.


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