Retirement isn’t just a financial milestone. It’s also a major life transition that can affect your mental health in a big way. After decades of working, problem-solving, and building relationships with coworkers, you’re suddenly out on your own—without a well-worn routine to anchor you. Not surprisingly, a study published in the Journal of Health Economics found a link between retirement and cognitive decline.

A well-planned retirement can do more than just ensure financial stability. When done right, it can foster peace of mind, reduce stress, and set the stage for a fulfilling lifestyle when you’re no longer working. Below are five ways thoughtful retirement planning can enhance your mental health and help you thrive in this exciting new chapter of life.

Reduced Financial Stress

This is an obvious one, but it carries a lot of weight. Entering retirement with unstable income can create significant stress and anxiety. A strong plan will use tax-advantaged accounts (and compound interest) to help your money work harder for you—during your working years and in retirement. The goal is to have a diverse mix of retirement income, which can ease your tax burden when you’re no longer working. That may include:

• Tax-friendly retirement accounts like 401(k)s and IRAs
• Social Security benefits
• Taxable brokerage accounts
• Whole life insurance that accumulates a cash value
• Annuities
• Pensions

A strong long-term financial plan is also built around your unique retirement goals and vision, whether that’s retiring abroad or spending more time with the grandkids.

Sense of Purpose

Roughly 70% of people define their sense of purpose through their work, according to research from McKinsey & Company. If you identify with that, stepping out of the workforce could be jarring to your mental health. How will you continue to feel purposeful and find meaning in your day-to-day life when you’re no longer contributing to your company? This is such an important question that we created a video to help folks weave their purpose into their retirement plans.

The bright spot is that retirement will carve out more time in your daily schedule—and how you fill that time is up to you. The right financial advisor can help you identify your goals and incorporate them into your retirement plan. You may find a renewed sense of purpose by:

• Exploring new hobbies, or dedicating more time and energy to pastimes you already enjoy
• Volunteering with organizations that are meaningful to you
• Traveling
• Taking classes and learning new things
• Assuming a more active role with your grandchildren
• Picking up a part-time job that keeps you active in your community
• Consulting or freelancing within your former industry

Connection with Others

A well-planned retirement should make space for your social life, which can significantly impact your mental health. Social isolation and loneliness can increase physical health risks and make you more likely to develop heart disease and Type 2 diabetes, according to the CDC. In terms of your mental well-being, it can also make you more susceptible to depression, anxiety, dementia, and early mortality.

This all drives home the importance of staying social in retirement, especially when you first leave the workforce and are adjusting to not seeing your coworkers every day. You can foster social connections by joining meet-up groups, participating in group hobbies and volunteer organizations, signing up for group exercise events, and making an effort to keep in touch with old friends.

A Stronger Relationship with Your Partner

The sooner you and your spouse get on the same page about retirement, the better. That can help you craft a long-term plan together that reflects your shared and individual goals. You’ll want to discuss:

• Where and when you’d like to retire
• What your ideal retirement looks like
• How much you’ll need to save
• Whether you’re prepared for health care costs in retirement, including potential long-term care expenses (understanding the nuances of Medicare can go a long way here)

The two of you may not have all the answers right now, and that’s okay. What matters most is opening the lines of communication and ensuring that you’re working toward the same retirement vision. Also be aware that you may be spending much more time together as retirees. How will you stay close and connected, while also nurturing your own sense of identity?

Emotional Resilience

When your finances and mental health are both going strong, you’ll likely find yourself more emotionally resilient in retirement. It’s easier to bounce back from difficult situations and setbacks when you have a strong foundation. That includes a fulfilling personal life, strong social connections, a sense of purpose, and a deep connection with your partner. Having these core components in place can help you weather difficult times and strengthen your resilience.

At Beacon Bridge Wealth Partners, we don’t look at retirement as an isolated financial event. Instead, we see it for what it is—a major milestone that also affects your physical, emotional and mental health. Having a well-planned retirement can help you ease into this next phase of life with confidence. This is at the core of our unique Total Retirement approach. Get in touch with us today to start planning the fulfilling retirement you deserve.