Top Retirement Fears and How to Deal with Them
May 1, 2020
Retirement can be scary for a number of reasons and individual reactions to these fears vary. Some people work longer to delay facing those fears, while others put their head in the sand, try not to think about the reasons retirement scares them and, as a result, don’t plan at all.
Whatever a person’s fears and reactions, it’s best to face them up front, well before they retire, before they cause irreparable harm to their golden years. Below are nine of the most common retirement fears that I come across in my practice, and some suggestions for dealing with them now.
Running Out of Money
This is the first retirement fear that most of my clients express. They worry they will outlive their money, or that high expenses or poor market returns will decimate their savings. For some, these fears are rational. They haven’t saved enough and/or are spending above their means. However, even when the data indicate that such fears are unwarranted, they may nonetheless persist.
The first step in dealing with this fear is to make a retirement plan. Ideally, one starts the plan well before retirement so that there’s time to make necessary changes before it’s too late (and/or too painful) to do so. I recommend engaging a financial planner to run the numbers, including alternative scenarios. The result of this exercise should be a comfortably high confidence level that income and assets are sufficient to cover expenses and liabilities for the rest of one’s projected life (or lives). The plan should also make room for “contingent liabilities,” or expenses that may or may not occur.
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