Don't Let Retirement Uncertainty Haunt You This October
Does the stress of planning and saving for retirement make your blood run cold?
Are you haunted that a little mistake down the line could cost you your livelihood in your golden years? If this sounds familiar, rest assured you are not alone. In fact, a recent survey found that only 24% of Baby Boomers feel confident they’ll have enough money to last through retirement.[i] That is a sobering number, but the good news is, there are ways to combat the stress and get on track no matter where you are. People make mistakes, it’s part of being human, and while some financial errors can have real financial repercussions down the line, better to forge ahead and learn from the mistakes. A little forethought and planning can make the world of difference not only for your retirement fund but also the stress around it. With a little motivation and some assistance, either in the form of educating yourself or seeking financial guidance, you can get back on track and cut that stress.
Organize Your Finances
The first step is getting your finances organized. According to the Bureau of Labor Statistics, the average Boomer will have an average of 12 jobs by the time they reach retirement.[ii] So, the first step would be organizing all the scattered 401(k)s, IRAs, various accounts, investments, insurance policies etc. It’s easy to acquire all sorts of accounts over our working life and it's often a Herculean task to keep all those accounts current and organized.
That disorganization causes stress, the task of trying to make sense of it alone can feel daunting. So, one of the first steps has to be streamlining, merging and assessing all these accounts. If it feels too big to tackle yourself, this is a great time to bring in some help in the form of a financial advisor. The act of getting the finances streamlines, consolidating information, possibly consolidating accounts like rolling small 401(k)s and IRAs together will make a world of difference. Like cleaning a messy room, removing all the debris allows you to see the space. Removing the financial debris can allow you to see what you really have and what you need. Also, like cleaning out a messy room, it is freeing to untether yourself from excess weight, and a great step in getting control over your financial stress.
Schedule Check-ins and Checkpoints
Once your finances are manageable and organized, the next step should be creating checkpoints and check-ins along the way so that you can stay on track. Treating your financial check-ins as a regular part of your yearly routine, like a dental cleaning or physical, can help manage the stress and keep you up to date on your overall financial health. For some, over checking their progress can actually do them a disservice. They aren’t seeing fast enough gains and this furthers their anxiety about the future. For that reason, once a year to check growth and allocate as needed, is the recommended amount to check-in.[iii] Like a watched pot that never boils, once your investments are in order, better to leave them be, confident you’ve done all you can.
If the stress you feel regarding retirement is that you won’t have enough or that you aren’t doing enough then it’s important to remember that long-term gains take a long time to build. Small drops eventually fill up a bucket. But if the worry is that there isn’t enough time and you won’t have enough money when you need it. Then the next step is seeking help and qualified advice on how to meet your needs. Share your feelings and hopefully come up with a plan to get to where you feel you need to be. If you are feeling deeply anxious about how and how much you are saving, don’t delay. With retirement savings you want as much time to plant seeds and watch them grow, the delay can limit your options and limit changes that can be made to alleviate some of the stress.
Your financials are only one part of retirement. How you will realistically spend your days, what you find fulfilling, where you want to be, and what you will be doing often have little to do with money and everything to do with you. For that reason, take some time to think about how you would like your days to go as a retired person. Without the schedule of work and obligations of smaller children, you may be surprised by how much time you have on your hands. What do you enjoy doing? Is there anything you’ve always wished you could do more of, be it volunteering, gardening, traveling? The more you explore how you would like to spend your retirement, the more you can budget and plan for how much that would cost. What can you live with or without? For some, perhaps downsizing to a smaller home that is convenient to amenities and more cost-effective may be a good answer. For some, the possibility of working part-time into retirement or delaying Social Security to max out the max payout may be a good option. For some, leaving the working world for the large ambiguous space that is retirement combined with a fear of what you will do all day and how you will pay for it, can be downright anxiety-inducing. But, the more time you plan out how you want to spend your days the more you can understand the cost and budget accordingly.
The Whole Picture
So, you’ve organized your finances, you have regular annual check-ins to chart your investments progress and you’ve devoted a good amount of thought to how you want to live once retired and created a budget around that. Still stressed? Well, the good news is that a recent study showed a large majority, 93%, report their lives being good or even better in retirement.[iv] Once retired, you may also realize you don’t need as much money as you thought and that the freedom and time you are now afforded is much more valuable. Good health, a freedom to fill your days how you please, having rich social lives and feeling a sense of purpose are often the real secrets to a happy retirement. Like most things in life, taking a holistic approach and looking at your retirement from all sides can help you find what is causing you stress. Be it being unprepared, disorganized, or feeling like you won’t have enough, the best advice is to confront the stressors and address them, the sooner the better. Being proactive and present, seeking guidance and help when needed, can be a huge stress reliever in preparing your retirement.
Disclosure text: Securities offered through Triad Advisors, LLC, member FINRA/SPIC. Advisory services offered through TriCapital Wealth Management, Inc. TriCapital Wealth Management, Inc. is not affiliated with Triad Advisors, LLC.