How to Tame Your Retirement Worries

Filed under: Retirement

When you’re planning for retirement, it’s a good idea to budget carefully, save everything you can, and consult with a financial advisor or insurance agent. But even if you’ve completed all the usual retirement planning steps, you might still feel nervous about actually retiring. Living on a fixed income for the rest of your life, no matter how well you’ve prepared, can be scary for anyone. If you’re experiencing retirement anxiety, take the following steps to tame your worries.

Adopt a conservative approach to money management in retirement. Like many people, you might be planning to withdraw 4 percent of your retirement fund each year. But you don’t have to follow that rule if you’re worried about outliving your money. Shift to a 3 percent withdrawal rate if you can. If you need more income in the future, you can always go back to the 4 percent strategy, but in the meantime more of your money will remain in your retirement fund, earning interest.

Diversify, diversify, diversify!* It can be nerve-wracking to depend on income from only one source. As you approach your expected retirement date, investigate ways to diversify your income stream. For example, some retirees choose to purchase an annuity with part of their retirement savings. Others take on a part time job.

Pay down your debt before you retire. One of the best ways to enjoy a stable and happy retirement is to enter these years free of debt. If you have to work a bit longer to pay down credit cards and other debt, you can enjoy more room in your budget and experience less anxiety about your future.

Seek wisdom from those who have already retired. You probably know some people who have already retired. Talk to them, and ask what they might have done differently if they could go back in time. Learn from their mistakes, and take heart in their encouraging words.

Review your plan one more time. Like many people, you might have set your retirement goals and decided upon a strategy years ago. In the meantime, perhaps your financial abilities or lifestyle expectations have changed. Make an appointment with your financial advisor or insurance agent, and have them run the numbers again. Make necessary changes in your plan together, or simply enjoy the reassurance of discovering that everything is on track after all.

Don’t retire yet. This might seem like the obvious solution, but if you’re overly anxious about retirement then maybe you shouldn’t do it just yet! Sometimes our worries about money actually signal a deeper fear. You could be worried about losing your identity, or feeling bored all day after you retire. Remember that there’s nothing wrong with continuing to work. In a few years, you might feel ready to retire, and you could enjoy a bigger savings due to waiting a bit longer!

* Diversification does not guarantee a profit or protect against a loss in a declining market. It is a method used to help manage investment risk.