The Psychology of Retirement
Expert-defined terms from the Professional Certificate in Retirement Transition Coaching course at London School of Planning and Management. Free to read, free to share, paired with a globally recognised certification pathway.
**Actively Constructive Retirement** #
A type of retirement in which individuals engage in activities that are both personally meaningful and contribute to the well-being of others. This can include volunteering, mentoring, or starting a second career.
**Annuities** #
Financial products that provide a guaranteed income stream for a specified period or for life. Annuities can be used as a retirement income planning tool to ensure that individuals do not outlive their savings.
**Behavioral Finance** #
A field of study that combines psychology and finance to explain how individuals make financial decisions. Behavioral finance can help retirement coaches understand why some clients make irrational financial decisions and provide strategies to help them make better choices.
**Boomerang Kids** #
Adult children who return to live with their parents after leaving home. This trend can pose financial and emotional challenges for retirees who were planning to live independently.
**Bucket List** #
A list of activities or experiences that a person wants to accomplish during their lifetime, often during retirement. Bucket lists can provide a sense of purpose and motivation during retirement.
**Caregiving** #
The act of providing care and support to a loved one, often a spouse or aging parent. Caregiving can be emotionally and physically demanding, and can impact a retiree's financial and retirement plans.
**Cognitive Decline** #
A natural part of aging that can impact memory, attention, and decision-making abilities. Cognitive decline can impact a retiree's ability to manage their finances and make important retirement decisions.
**Cohousing** #
A type of housing arrangement in which residents live in separate units but share common spaces and resources. Cohousing can provide a sense of community and social connection during retirement.
**Delayed Retirement** #
The decision to postpone retirement beyond the traditional retirement age. Delayed retirement can have financial benefits, such as allowing individuals to continue contributing to their retirement savings and delaying the start of Social Security benefits.
**Downsizing** #
The act of selling a larger home and moving to a smaller, more manageable living space. Downsizing can provide financial benefits, such as reducing housing costs and freeing up equity.
**Estate Planning** #
The process of organizing and managing an individual's assets and property to ensure that they are distributed according to their wishes after death. Estate planning can help retirees protect their assets and provide for their loved ones.
**Financial Planning** #
The process of creating a comprehensive plan to manage an individual's financial resources to achieve their short- and long-term financial goals, including retirement planning.
**Flexible Retirement** #
A type of retirement in which individuals gradually reduce their work hours or transition to a different role or career before fully retiring. Flexible retirement can provide a sense of purpose and financial security during the transition to retirement.
**Gamification** #
The application of game-design elements and principles to non-game contexts, such as financial planning and retirement planning. Gamification can help engage and motivate retirees to make better financial decisions.
**Healthcare Planning** #
The process of creating a plan to manage an individual's healthcare needs during retirement. Healthcare planning can include selecting healthcare providers, determining coverage options, and creating a plan for long-term care.
**Hybrid Retirement** #
A type of retirement that combines traditional retirement activities, such as travel and leisure, with part-time work or volunteering. Hybrid retirement can provide a sense of purpose and financial security during retirement.
**Identity Transition** #
The process of adjusting to a new role or identity, such as retiree. Identity transition can impact an individual's sense of purpose, self-worth, and relationships.
**Legacy Planning** #
The process of creating a plan to leave a lasting impact or legacy after death. Legacy planning can include creating a will, establishing a trust, and making charitable contributions.
**Longevity Risk** #
The risk of outliving one's retirement savings. Longevity risk can be managed through retirement income planning strategies, such as annuitization and delayed Social Security benefits.
**Long #
Term Care** - The care and support needed for individuals who can no longer perform activities of daily living, such as bathing, dressing, and eating. Long-term care can be provided in a variety of settings, including nursing homes, assisted living facilities, and home care.
**Phased Retirement** #
A type of retirement in which individuals gradually reduce their work hours over time before fully retiring. Phased retirement can provide a sense of purpose and financial security during the transition to retirement.
**Post #
Retirement Re-engagement** - The act of returning to work or volunteering after retirement. Post-retirement re-engagement can provide a sense of purpose and financial security during retirement.
**Psychological Retirement Readiness** #
A measure of an individual's readiness to retire based on their psychological preparedness, including their sense of purpose, identity, and social connections.
**Retirement Income Planning** #
The process of creating a plan to manage an individual's retirement income sources, such as Social Security, pensions, and retirement savings, to ensure that they have enough income to meet their needs during retirement.
**Retirement Lifestyle** #
The way in which individuals choose to live during retirement, including their activities, interests, and hobbies. Retirement lifestyle can impact an individual's sense of purpose, social connections, and overall well-being.
**Retirement Planning** #
The process of creating a plan to achieve one's retirement goals, including financial planning, healthcare planning, and lifestyle planning.
**Retirement Risk Management** #
The process of identifying and managing risks during retirement, such as investment risk, inflation risk, and healthcare risk.
**Retirement Savings** #
The funds set aside for retirement, often through employer-sponsored retirement plans, such as 401(k)s and IRAs, or personal savings and investments.
**Retirement Transition** #
The process of adjusting to retirement, including the psychological, social, and financial aspects of the transition.
**Role Transition** #
The process of adjusting to a new role or identity, such as retiree. Role transition can impact an individual's sense of purpose, self-worth, and relationships.
**Social Connections** #
The relationships and social networks that individuals have during retirement. Social connections can impact an individual's sense of purpose, well-being, and overall health.
**Social Security** #
A federal program that provides retirement benefits to eligible workers and their spouses, children, and survivors. Social Security benefits can provide a source of income during retirement.
**Solo Aging** #
The phenomenon of aging without a spouse or partner, children, or other close relatives. Solo aging can pose financial and emotional challenges during retirement.
**Transition Coaching** #
A type of coaching that helps individuals navigate life transitions, such as retirement. Transition coaching can provide support and guidance during the retirement transition, including creating a retirement plan, managing retirement risks, and adjusting to a new retirement lifestyle.
**Volunteering** #
The act of giving one's time and skills to a cause or organization without pay. Volunteering can provide a sense of purpose, social connections, and fulfillment during retirement.
**Working in Retirement** #
The decision to continue working during retirement, either full-time or part-time. Working in retirement can provide a sense of purpose, social connections, and financial security.
Ageism #
Stereotyping, prejudice, and discrimination against people based on their age. In the context of retirement, ageism can manifest as negative attitudes towards older workers or retirees, limiting their opportunities and contributing to social isolation.
Anticipatory Social Isolation #
The fear or expectation of becoming socially isolated in retirement, often due to the loss of workplace connections and social roles. Anticipatory social isolation can negatively impact mental health and quality of life during retirement.
Baby Boomer #
A person born between 1946 and 1964, often associated with a large population increase following World War II. Baby boomers are currently reaching retirement age, leading to significant changes in the demographics and needs of retiree populations.
Cognitive Rehearsal #
The process of mentally rehearsing or practicing new skills, roles, or activities. Cognitive rehearsal can help retirees adapt to new situations and hobbies during retirement, fostering a sense of purpose and engagement.
Deaccumulation #
The process of reducing, managing, and redistributing assets during retirement, often to meet financial goals and maintain a desired standard of living. Effective deaccumulation strategies require careful planning and consideration of various factors, such as life expectancy, health, and inflation.
Disengagement Theory #
A theory suggesting that as people age, they gradually withdraw from social roles and activities. While disengagement theory has been criticized for its negative portrayal of aging, it highlights the importance of maintaining social connections and purpose during retirement.
Ego Integrity #
A stage of psychosocial development, according to Erik Erikson, characterized by a review of one's life and accomplishments. Ego integrity is particularly relevant during retirement, as individuals assess their contributions, legacy, and sense of fulfillment.
Financial Literacy #
The ability to understand and effectively manage personal financial resources, including budgeting, investing, and planning for retirement. Financial literacy is essential for retirees to make informed decisions about their financial well-being and maintain a desirable quality of life.
Generativity #
A stage of psychosocial development, according to Erik Erikson, in which individuals focus on guiding and nurturing the next generation. Generativity can be an essential aspect of retirement, as retirees seek to contribute to their communities and leave a lasting legacy.
Healthy Aging #
A process of maintaining physical, mental, and social well-being as individuals grow older. Healthy aging involves adopting positive lifestyle habits, engaging in meaningful activities, and managing health conditions to optimize quality of life during retirement.
Identity Transformation #
The process of redefining one's identity and sense of purpose following a major life transition, such as retirement. Identity transformation often involves exploring new hobbies, roles, and relationships, fostering personal growth and fulfillment.
Leisure Education #
A process of learning and developing skills to engage in leisure activities during retirement, often focusing on self-expression, personal growth, and social interaction. Leisure education can help retirees maintain a sense of purpose and engagement during their post-career years.
Phased Retirement #
A gradual transition from full-time work to full retirement, often involving reduced work hours, flexible schedules, or part-time employment. Phased retirement allows individuals to gradually adjust to retirement while still maintaining some income and social connections.
Psychological Capital #
A combination of personal resources, including self-efficacy, hope, optimism, and resilience, that contributes to individual well-being and success. Psychological capital is particularly important during retirement, as it helps retirees navigate challenges, maintain positive attitudes, and adapt to new situations.
Psychological Retirement Readiness #
The degree to which individuals are emotionally, socially, and financially prepared for retirement. Psychological retirement readiness involves assessing one's readiness for the transition, addressing potential challenges, and fostering a sense of purpose and engagement during retirement.
Retirement Lifestyle #
The pattern of activities, roles, and relationships that individuals engage in during retirement, often reflecting their values, interests, and goals. Retirement lifestyle can significantly impact retirees' quality of life, happiness, and sense of fulfillment.
Retirement Transition Coaching #
A process of providing guidance, support, and resources to help individuals navigate the retirement transition, often focusing on psychological, social, and financial aspects of retirement. Retirement transition coaching can help retirees optimize their well-being, engagement, and satisfaction during their post-career years.
Role Theory #
A theory suggesting that individuals' identities and behaviors are shaped by the social roles they occupy, such as worker, spouse, or retiree. Role theory highlights the importance of maintaining a sense of purpose and engagement during retirement, often by adopting new roles and activities.
Social Engagement #
The degree to which individuals participate in social activities, interact with others, and maintain meaningful relationships. Social engagement is essential during retirement, as it contributes to mental health, well-being, and quality of life.
Social Integration #
The process of becoming an active and valued member of a community or group, often through volunteering, social activities, or shared interests. Social integration is particularly important during retirement, as it fosters a sense of belonging, purpose, and connection.
Successful Aging #
A concept that emphasizes the importance of maintaining physical, mental, and social well-being as individuals grow older, often by adopting positive lifestyle habits, engaging in meaningful activities, and managing health conditions. Successful aging is closely related to healthy aging and is a common goal for retirees seeking to optimize their quality of life during retirement.
Third Age #
A stage of life following full-time employment and preceding old age, often characterized by active engagement, personal growth, and contribution to society. The third age is a common framework for understanding retirement as a period of opportunity, exploration, and fulfillment.
Transition Theory #
A theory that explains how individuals adapt to significant life changes, such as retirement, by moving through stages of pre-transition, transition, and post-transition. Transition theory highlights the importance of preparing for and managing the retirement transition to optimize well-being and satisfaction during retirement.
Volunteerism #
The act of providing unpaid service or assistance to others, often through organizations or community initiatives. Volunteerism is a common activity during retirement, as it allows retirees to contribute to their communities, maintain social connections, and foster a sense of purpose and engagement.
Work #
Life Balance: The degree to which individuals effectively manage their work and personal lives, often by prioritizing leisure activities, relationships, and self-care. Work-life balance is essential during retirement, as it helps retirees maintain a desirable quality of life, reduce stress, and foster personal growth and satisfaction.
Workplace Flexibility #
The ability to modify work schedules, tasks, or locations to accommodate individual needs and preferences. Workplace flexibility is increasingly important during the retirement transition, as it allows individuals to gradually reduce their work hours, maintain social connections, and ease into retirement.