People dream of retirement for decades, diligently saving to grow their nest egg. Unfortunately, when the time comes to start drawing off those funds, worry often ensues.
The “what if I run out of money” anxiety is all too common. For your entire career, money steadily flowed into your savings pile. You likely had a dependable stream of income hit your bank account. The prospect of finally tapping into your nest egg can feel quite daunting. You need to know how to pull from that lump sum to live off of, while making sure you have plenty left for later.
One of the biggest fears retirees have is that they will outlive their money. While it is certainly a valid concern for some, many have more than enough to live the life they’ve been dreaming of. Staying well informed about your evolving financial situation is the key.
Do retirement spending anxieties keep you up at night? Here are five tips to help:
- Plan it out before you hang it up. Have a financial plan in place before you leave the workforce. Know what your income streams and expenses will look like. You will be much less likely to have unforeseen financial shocks if you have gotten a solid lay of the land already.
- Understand your money situation. A lot of financial fears come from being unsure about what is available to you. How much money do you have? What is your tax situation? Where are you on debts? How about your monthly bills? Your “fun money”? It can be quite a lot to get a handle on, especially if you had a completely dependable flow of income while in the workforce. Become knowledgeable and organized. Consolidate any accounts you can to simplify things. Stay on top of your balances and seek out advice when you need it.
- Lean on your financial advisor. Don’t be under the impression that your financial advisor’s job is complete when you retire. It’s quite the opposite. We should be your go-to resource for guidance throughout your retirement years. At the very least, check in annually to revisit your financial plan and tweak it as needed. If your lifestyle is completely different than you had anticipated, it is even more important to touch base to make sure you remain on solid financial footing.
- Avoid retirement doomsday tales. Don’t let the financial mishaps of others make you feel uncertain. You may have heard or read stories of retirements gone awry, leaving people strapped for cash. Understand that the financial situation for every retiree is unique. There is no one-size-fits-all nest egg. Likewise, everyone’s spending habits are vastly different. Be confident in how you planned for retirement and your ability to navigate what may come your way.
- Be flexible on inheritances. Aspiring to leave money to your friends, family members, or beloved organizations is an honorable endeavor. Don’t let those desires hamstring you while you are alive. It’s your money after all. Make certain you make your wellbeing the top priority in retirement. Spend as you’d like. More importantly, if the unexpected does happen, be willing to pivot to take care of yourself.
If you would like additional guidance on how to make the most of your retirement financial situation, we would be happy to help. Schedule a free introductory phone call here.