You spend most of your working years saving and preparing for retirement, but as you get closer to your goal, you might start to have mixed feelings. Although you might be excited you might also feel uncertain about life after work. Will you run out of money? Will your health give out on you? Will you even like retirement? A critical part of managing retirement anxiety is being prepared.
Here’s how to manage retirement anxiety so you can enjoy your golden years without fear.
Set realistic goals
Setting unattainable retirement savings goals is one sure way to fill yourself with anxiety. Placing the bar too high will make you feel like you’ll never reach your goal. Although it’s great to aspire to reach a certain retirement goal, you might be setting yourself up to fail. Repeatedly missing your mark could make you feel discouraged and tempt you to give up. Instead, meet with a certified financial planner. He or she can help you establish a retirement savings plan that works best for your situation.
Track your progress
Learn how much you need to save and monitor your progress. Not knowing where you should be at your particular stage in life is another factor that will keep you awake at night. There are plenty of retirement calculators and tools out there to help you assess where you should be with your retirement savings goals. Two resources that can take some of the uncertainty out of planning are the T. Rowe Price retirement income calculator and TIAA’s retirement advisor.
Have a back-up plan
Retirement doesn’t always go as planned. Detours can and do happen. The important part is to be prepared for the unexpected. Establishing multiple income streams can help provide a buffer against tough financial times. Consider becoming a landlord, taking on some freelance or consulting work, or starting a side business. This way, you can get ahead of a retirement crisis before it hits.
Speak with a retirement planning professional to help you determine how much you will need to sustain your desired lifestyle. Speaking with a professional will help answer your questions and give you a clear plan of action. Also, consider creating an additional stream of income as an entrepreneur. Turning your hobby into an income-producing side hustle will help ease your retirement anxiety.
If you discover you’re behind on savings after you’ve tracked your progress, now is the time to play catch-up. In addition to socking away raises and bonuses, take advantage of catch-up contributions. For 2018, if you participate in a 401(k), 403(b), most 457 plans, or the federal government’s Thrift Savings Plan, you’re allowed to contribute an annual maximum of $18,500. And if you’re age 50 or older, you can make catch-up contributions in the above plans up to $6,000. Maximum annual contributions to an IRA are capped at $5,500. The annual catch-up contribution for an IRA is a bit lower at $1,000.
Get debt under control
It will be much easier to reach your retirement goals if you get a handle on your debt. Retirement will be a lot less comfortable if you’re still carrying a mortgage and high-interest credit card debt. If you’re at a point where your debt is out of control and you just can’t seem to dig your way out, speak to a financial professional such as a certified credit counselor. He or she can help you develop a plan to make your debt more manageable. Visit the National Foundation for Credit Counseling website for more information on how to find a counselor.
Grab a buddy
If you’re feeling anxious about your retirement, why not enlist the support of a retirement buddy? You can cheer each other on when the going gets tough. David Ning, founder of personal finance site MoneyNing, suggests looking for a retirement planning buddy so you can stay motivated and remain on track. Ning says you can share new strategies for reaching retirement planning goals. A retirement planning buddy can also hold you accountable when it comes to making financial decisions.
In addition, your buddy can help you reach your goals by offering friendly competition. “You may want to challenge your friend to see who can save the most in the next 30 days, or you can hold a competition to see who can find the lowest priced lender for a refinance. The great part about these competitions is that everybody comes out a winner,” says Ning in his column for U.S. News & World Report.
Establish a social network
One reasons some retirees become anxious and depressed is because they’re isolated. The likelihood you’ll become clinically depressed rises by 40% after retiring according to a study by the London-based Institute of Economic Affairs. Decide how you want to spend your free time before you retire. Surrounding yourself with friends, family, and others who are also retired can reduce feelings of loneliness.
Talk to someone
There’s no shame in talking to someone about your retirement fears. It could be one of your friends, family, or a mental health professional It’s OK to be afraid of the unknown, but it’s important to talk through the feeling so you can move forward and start making the appropriate plans.
Follow Sheiresa on Twitter @SheiresaNgo.
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