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6 Ways to Stop Panicking About Retirement

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Editor’s Note: This story originally appeared on NewRetirement.

Many of us are terrified of jumping into retirement. We read about the retirement crisis and worry about our own finances, but millions of people retire every year and report feeling great about their lives.

Is it possible that you should “Keep Calm and Retire On”?

How Worried Should You Be About the ‘Retirement Crisis’ and Your Own Finances?

Confused stressed older couple looking at bill or credit statement
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First the bad news, the retirement crisis is real:

  • Most of us have not saved enough. Fifty percent of baby boomers have less than $100,000 saved for retirement.
  • According to the latest accounting from Fidelity, the average couple in retirement will need at least $315,000 to cover health care costs alone.
  • The government’s retirement programs — Medicare and Social Security — are at risk of running out of money.
  • The economy has made it very difficult for us to feel prepared. And, uncertainty is really the only thing we can be sure of about the future.
  • Very few people who are still working feel good about their retirement prospects. According to the Employee Benefit Research Institute’s 2023 Retirement Confidence Survey, only 18% of workers feel very confident in their ability to live comfortably in retirement.

While the retirement crisis is real, it doesn’t necessarily apply to your own finances. In fact:

  • Feeling desperately stressed about the decision to retire does not necessarily mean that you aren’t ready.
  • Many genuine fears about retirement can be solved with a few tweaks.

So, what should you do?

Rethink What the Retirement Crisis Means — Keep Calm and Retire On

senior woman at home
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Sometimes the best way to solve a problem is to find a solution. Other times, you are better off reframing the problem. That is what many happy retirees are doing.

Here are ideas for rethinking retirement, what it means and whether you are ready for it or not.

1. Rethink What You Value (Time Over Money)

retirees retirement
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There may be a retirement crisis, but it is not negatively impacting people who take the plunge and retire.

According to a Merrill Lynch Study, Beyond the Bucket List, of all times in our life, we are happiest and most content between the ages of 65 and 74.

With all of our financial woes, how can this be?

Researchers suggest that while we may not have the right monetary assets, retirement gives us an abundance of time, and it is this sense of freedom and possibility that gives us true happiness.

Appreciate Greater Freedom and Flexibility

A fit senior holding a surfboard at the beach
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Maybe the problem is not that we have too little money in our lives. Maybe the real problem is that we don’t have enough leisure time.

The study’s authors write:

“As retirees move from work into retirement, nine out of ten (92%) say retirement gives them greater freedom and flexibility to do whatever they want — and on their own terms.

“Leaving full-time work behind, retirees say they are able to create their own schedules, open a business, sleep in, exercise more, get to know their grandchildren better, fall in love again, travel, read more, unplug, volunteer, learn a new skill, and try lots of things that they could previously only dream about.

“And, nearly all retirees tell us that freedom and flexibility increase, regardless of how much money they have.”

2. Rethink What Working Means: Get a Job Doing Something You Love Doing

Older worker
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Retirement does not have to mean giving up work entirely.

More and more of today’s successful retirees are leaving inflexible jobs that they don’t really enjoy in pursuit of full or even part time work doing something they really love doing.

Work does not have to mean nose to the grindstone forever.

Use the NewRetirement Planner and see what happens to your retirement plan if you phase out of work or work part time or seasonally for five to 10 years.

3. Rethink Your Retirement Age: Is 75 the New 65?

Older female executive worker
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We are living much longer and much healthier lives. There is no reason to think that it is time to wind down when you turn 65.

You have probably envisioned retiring at around 65 for most of your life, but times have changed.

Odds are that you are healthier than your parents were at this age. The data also suggests that you will live longer than them.

You should not retire at 65 simply because you reach that milestone. You should retire when you are ready and prepared for the next chapter of your life. Retire because you have something you want to do — not just because you want to stop working.

4. Rethink How Much You Need

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Figuring out how much money you need for a secure retirement is a top priority if you are considering retirement.

However, it is important to remember that this number does not need to be dependent on what you have been spending over the last 10 or 20 years of your life.

Retirement is a whole new chapter of your life. You can rethink where you live and what you spend money on. And, you can plan for different phases of retirement — with different spending levels for each phase.

Rethinking your retirement budget can dramatically lower how much you need overall and make you feel better about your retirement prospects.

Are You Saving Too Much?

A man uses a calculator and computer while working at his desk
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For everyone who hasn’t saved enough, there may be someone who has saved too much.

Yep. Many people over save for retirement and lose years of freedom because they are worried about running out of money, even though they have lots.

5. Rethink Assets If You Have Home Equity

Home equity loan
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When people talk about how much you need for retirement, they are usually talking about how much you should have saved and how that money is invested.

However, the greatest source of wealth for most retirees is in your home. Your home is likely worth more than all of your savings combined.

So, what if you downsize and use some of your home equity to help fund retirement?

6. Rethink Retirement Planning — You Can Do It

Senior man lost in thought
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No matter who you are or how much you have saved, it is worthwhile to document a detailed retirement plan. While most people hear retirement plan and think 401(k)s and IRAs, retirement planning means a lot more than just having a savings account.

Retirement planning includes thinking about budgets when you will start Social Security, what kind of supplemental Medicare coverage you will carry, where you will live, whether or not you’ll use home equity, if you will work during retirement, potential inflation rates, investment returns and much more.

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