Transform Retirement Anxiety to Confidence and Clarity
It’s no secret that Americans, on the whole, are worried about their future retirement. In fact, according to a recent report, roughly 3 out of 4 Americans are concerned about economic conditions that may impair a secure retirement. This is a sentiment shared across the entire political spectrum, as the report notes, but is also one we see across all socioeconomic classes, including those on the upper end of the spectrum.
For example, one of my clients, a fifty-something techie, has enjoyed a stable career that’s provided many benefits over the years, like a great income to send his kids to college debt-free, wonderful family vacations, and a lifestyle that was above average. But due to everyday pressures of the job, he began getting tired of the “game,” so he and his wife came to me to find out if he could retire sooner than expected.
During the financial planning process, we found he had done a fair job of saving through his 401(k) plans with various employers. He had even received bonuses in the form of company stock options and restricted stock of his company, and even had a small inheritance from his parents.
But uncertainty still gnawed at him. As he told me, “I have something in every bucket that can be used for my future, but there are too many choices that I have to work with. How is the best way to proceed and will it even work?”
His wife also had some apprehension about him retiring so early in life. What would he do with his days? What would they have to sacrifice in the form of lifestyle reduction if he did retire early? What if they run out of money or have emergencies that cause them to spend more money than planned?
Keep in mind: this household already had significant assets. According to the Employee Benefit Research Institute (EBRI), one in four workers (24%) confessed they and their spouse have less than $1,000 saved for retirement. About 50% said they had saved less than $25,000. So these clients were already on better footing than many Americans.
But worry, confusion, anxiety, and uncertainty can (and do) affect higher net worth households. The solution? Embarking on the financial planning process together. As we moved forward, we began to clarify more about their situation: the obstacles that could derail their future plans, the opportunities (and goals) that we could capture together, and the strengths (resources) they brought to the table which we could utilize for their goals. Together, we put the plan in motion.
And with each step, their anxiety was lifted and peace of mind set in.
Ultimately, building a customized plan that they were comfortable with has allowed them to move forward with the clear retirement date, action plan, and blueprint for their futures. And as life throws different curve balls, we continue to adjust the plan as needed.
Knowing that there is a clear plan in place has given these clients peace of mind, which enables them to enjoy what is perhaps their most precious asset: time. Instead of being plagued with worry, they can be present with one another and their friends, which is perhaps the greatest gift of all.
Learn more about the author, Barton Couch, CFP®.401(k)AmericansanxietyEmployee Benefit Research Institutefinancial planninghigh net worthinheritancepeace of mindrestricted stockretirementstock optionsworry