Many Americans may feel financially prepared for retirement, but the emotional transition and rising health care costs remain significant hurdles, according to a recent survey.
The 2025 Trends in Retirement Planning survey report, released by the Financial Planning Association (FPA) and the Journal of Financial Planning with support from Finance of America, gathered feedback from 167 financial planners to offer insights into evolving retirement challenges. And here’s what they found.
Retirement readiness is more than money. Discover the emotional disconnect and biggest fears retirees face.
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Financial vs. emotional retirement preparedness
There’s a striking disconnect between financial and emotional preparedness. While over half of planners feel their clients are financially ready for retirement, only 11% believe those same clients are emotionally prepared.
The survey found that nearly 60% of planners indicate clients are only moderately emotionally prepared, and 5% believe clients are not prepared at all.
According to the report, clients often grapple with fears about:
- Adapting to no longer working
- Losing their sense of identity
- Potentially becoming a burden to loved ones
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“Studies show that while health and wealth are vital for a successful retirement, being mentally and emotionally prepared is more critical,” said Mitchell Kraus, a certified financial planner with Capital Intelligence Associates. “No matter how financially ready an American is to retire, their retirement can lead to a shorter and less fulfilling final chapter if they are not emotionally prepared.”
Jim DeGaetano, a certified financial planner and author of “The Fruitful Retirement,” draws this parallel: “The emotionality involved in leaving one’s life work cannot be understated. In fact, as I discuss the four stages of retirement in my book, there is a similarity to the phases of grief and loss. Wealth advisers must understand how critically important it is for their clients.”
As a result, financial planners are increasingly going beyond managing money to help clients address these significant emotional and lifestyle adjustments. “Being emotionally prepared is almost as important as being financially prepared,” said Kris Etter, a certified financial planner with Beacon Financial Planners. “Life does not stop happening just because you retire.”
Bridging the emotional gap
Financial advisers across the country are developing innovative approaches to address the emotional aspects of retirement. Their strategies offer valuable insights for those planning this major life transition.
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David Demming, a certified financial planner with Demming Financial Services, believes in gradual transitions, recommending “phasing down rather than abruptly retiring to adapt emotionally as well as financially.” Rather than a complete stop to working life, he strongly advocates for “partial employment” with a refreshing philosophy of “work for play, not pay.”
Building on this approach, Catherine Valega, a certified financial planner with Green Bee Advisory, emphasizes that having sufficient finances isn’t the complete picture: “Even those with enough money – that is not enough to maintain health both emotional and physical during the possibly several decades spent in retirement.” To address this gap, she’s developing a practical solution to help people “test-run their retirement lives” before fully committing.
Rob Schultz, a certified financial planner with NWF Advisory Group, reinforces this approach: “Scaling back work tends to be successful because it gives you a trial run at what it would be like and you can see if you like being retired without fully committing to it. Once you are out of the workforce, it can be tough to re-engage.”
While some advisers focus on transition strategies, others like Ed Snyder, a certified financial planner with Oaktree Financial Advisors, takes a proactive approach from the very beginning by asking “prospective clients in their first meeting what their retirement lifestyle looks like for them.” This early visualization helps clients prepare mentally as he guides them to “imagine what kinds of things they will want to be doing” and consistently encourages them to “stay active and involved.”
Patti Black, a certified financial planner with Savant Wealth Management, frames this proactive approach by “encouraging clients to know what they are retiring to, not just what they are retiring from. What is their purpose in retirement, their reason to get up and get going every day?” She’s even working to shift the perspective “from ‘becoming a burden’ to ‘becoming a blessing.'”
Taking this comprehensive approach even further, Juliette Williams, a certified financial planner with Wealthspire Advisors, thoroughly goes “beyond the numbers” with her clients. She facilitates deeper conversations through targeted questions including:
- “What does it feel like to spend your days and nights together, as opposed to only your evenings while you are working?”
- “What does a regular day/week look like in retirement? How do you plan to spend your time?”
- “How do you think you will feel about no longer being known as whatever it is they do for a living?”
Marcos Segrera, a certified financial planner with Evensky & Katz/Foldes Wealth Management, takes an innovative linguistic approach by “intentionally reframing ‘retirement’ as ‘repurposing'” to encourage clients “to view this significant life stage not as a passive cessation but as an active, deliberate redirection of their accumulated energy, wisdom, skills, experience, and passions towards new or redefined goals.”
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Williams summarizes the philosophy that connects all these approaches: “I often tell my clients that the numbers will work out because they’ve been working toward the numbers all of their lives. I want to ensure that the life part works out as well as the numbers.” Edward Thomas, a certified financial planner with Savant Wealth Management, puts it even more succinctly: “It is more behavioral coaching than financial.”
Advice for those saving for retirement
Prepare emotionally and financially. Retirement is a significant life change that requires reflection on what life will look like beyond work. Consider hobbies, social connections, and how you’ll structure your time.
“Retirement readiness goes far beyond numbers,” said Nathan Sebesta, a certified financial planner with Access Wealth Strategies. “Emotional preparedness and clarity on how you’ll spend your time are just as vital.”
Laura Mattia, a certified financial planner with Wealth Enhancement Group, stresses the importance of personalized planning: “Decisions regarding retirement are not just about the number of years worked or the age they aim for. There is no formula or one-size-fits-all answer.” She recommends a six-step approach that begins with exploring “plans in retirement to pursue a new or continued passion, utilize skills, stay social, build relationships, and maintain health.”
DeGaetano offers a helpful framework through his “A Happy Retirement Is Freedom” acronym, which covers five essential factors:
- Activities: How you’ll spend your day
- Health: Staying active and healthy
- Relationships: Nurturing connections that bring joy
- Intention: Both spiritual and personal
- Financial security: The foundation for freedom
Kraus recommends starting early: “Start talking about retirement early. Ask clients from our first meeting what they would do if they didn’t have to work anymore.” He also suggests “trying out the activities they plan on doing at retirement” before fully committing to them.
Advice for those living in retirement
Acknowledge and address emotional adjustments. If the transition proves challenging, seek resources or support to navigate the emotional aspects, such as adjusting to new routines or finding purpose outside of work.
Etter reminds retirees that understanding your financial tools and when to use them can help manage stress.
Glenn Downing, a certified financial planner with CameronDowning, poses a crucial question to new retirees: “What are you going to do with yourself all day?” He notes that the response “tells me volumes. If I get a blank look back, I know that the retiree has only thought about the negative (i.e., not having to go to work) and not the positive (i.e., the opportunity to completely reinvest oneself).”
“Ultimately, a successful retirement blends financial stability with purpose and proactive health and lifestyle planning,” says Sebesta.
Resources that can help would-be retirees become emotionally ready include the blog “The Retirement Manifesto” and the book “The Keys to A Successful Retirement” by Fritz Gilbert.