For recent retirees, adjusting to life on a fixed income can be particularly difficult at holiday time.
Are you obligated to continue inviting a lot of work friends to your holiday party? Is everyone in your family expecting the same level of gifts you’ve always given? Is it always your turn to host the holiday meal?
Add on a layer of possible remorse after getting that last paycheck and it all makes for a potentially depressing holiday.
The secret, experts say, is to find a balance between keeping some comforting traditions and letting go of ones that obviously no longer fit.
That first holiday after retirement can be a golden opportunity to set new expectations, but talk the walk first, financial therapist Marilyn Wechter recommends.
“This can be a fabulous opportunity” to lay the groundwork for new holiday traditions, said Wechter, a licensed social worker and wealth counselor who is a member of the Financial Therapy Association, a professional group.
If time is the new currency, retirees can offer dinners out or even home-cooked meals instead of expensive toys for their grown children, Wechter said. Write letters to grandchildren telling family stories or suggest gift exchanges or spending limits that focus the giver on creativity rather than shock and awe, she said.
And as for old work friends, do stay in touch and perhaps get together for a few lunches or dinners to keep social connections strong, but there’s no need for a catered blowout.
Just don’t force sudden change all at once, Wechter cautions.
If (and only if) you can afford it, keeping holiday budgets pretty much the same in the first year of retirement, when you’ve been hit with so many other dramatic changes, can be comforting for you and the rest of the family.
What must change, though, is the conversation.
With the family gathered, start talking about your new life in retirement in general, not just during the holidays, Wechter said.
“It’s a chance to say, ‘We’ve retired now, there are a lot of changes in our lives, and we want to talk about that,’ ” she said. “It’s a great time to talk about estate planning” and letting your kids know you’ve got a handle on your retirement plan so they don’t worry about what expenses they may have to cover for you some day, she said.
In that context, talking sensibly about new holiday spending patterns makes sense to everyone.
Ideally, of course, prudent savers wouldn’t have set lavish holiday spending patterns during their working years, notes Jeff Yeager, author of “How to Retire the Cheapskate Way.”
“The notion that we have to spend less in retirement is only true if we were overspending before,” he said.
That’s not realistic for everyone, Yeager acknowledges, but either way he echoes the need for family conversations, particularly for extended families that may not have the same traditions.
“If you say something like, ‘Can we have a mutual understanding about what’s expected?’ usually brings a sigh of relief from everyone,” he said.
Talking with, or even coordinating with, the other set of grandparents on presents for the little ones, for example, will avoid redundant gifts and, if done right, can lessen the gift-giving arms race, Yeager said.
Finally, if retirement is still a few years away and you tend to overspend at holiday time, Yeager recommends starting these efforts now.
“There’s no time like the present to start scaling back, rather than making that first year in retirement a day of reckoning.”
Janet Kidd Stewart writes for the Chicago Tribune. Pose a retirement question at journeyjanetkiddstewart.com.
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