By Alison Bailin Batz
According to a recent survey by the Insured Retirement Institute, nearly 50% of Baby Boomers have not yet begun to save for retirement.
“There is also quite a bit of research on those who have,” says Mike Brown, Arizona regional president of Washington Federal Bank. “And the news is not good. Many do not have near enough to live on in retirement given their current and projected annual expenses.”
The result: retirement anxiety.
“It is a real thing. Think sleepless nights. Think constant worry. Think actual medical issues as a result if this sort of stress becomes chronic,” Brown says.
Sherry Hall, founder of Hallmark Financial, says the stress may even be worse for women. She says 80% of women feel unprepared to make wise financial decisions.
“In fact, this phenomenon is called ‘the confidence gap,’” Hall says.
Another issue, according to Hall, is consumer debt.
“Consumer debt is an anchor weighing down a huge portion of those in their 40s, 50s and 60s who are balancing a growing family, kids in camp and college, a car financed with monthly payments, et al,” Hall says. “But the reality is that today’s bills must be balanced with savings, especially in things like 401Ks and IRA accounts.”
And it need not be done alone, according to Hall and Brown.
“Working with a financial adviser may bolster one’s confidence to face uncertainties with a good roadmap that adjusts to whatever life brings,” says Hall, who advises to find a professional who specializes in a sustainable, diversified income flow that assumes a long timeline.
But what does a long timeline mean? Many Boomers and others hope by Googling retirement savings they will find an easy answer and goal number.
“When they don’t get a quick fix or exact answer, the anxiety comes back yet again,” says Jim Stark, founder of JRS Wealth Management Group. “Retirement calculations are not as simple as plugging information into a database and letting a program spit out numbers.”
Stark notes that, instead, it takes having some in-depth discussions – sometimes hard conversations – with a qualified adviser who can help you set up a plan, monitor and adjust it on an ongoing basis.
“And whether one has an adviser or not, there is one critical thing we can all do to help ease our retirement anxiety: having a budget and knowing where each dollar is going on an average month in the household,” Stark says.
After determining the above, Stark notes to:
• Follow a budget each month
• Live below your means
• Avoid debt
•Have an emergency reserve fund including six month of living expenses
• Maximize your retirement plan contributions
•Plan on working longer if needed
It also means determining life’s wants versus its needs. And saying “no” from time to time.
“The ability to make educated, rational decisions in this arena is imperative,” Andrew Sampson, a financial adviser at Wilde Wealth Management Group. “For example, if buying a luxury will cause you to delay retirement—don’t blindly make the investment. Sit down. Put pen to paper. Ask your adviser for input. Consider the ramifications before the purchase.”
Sampson also cautions those who want to take on retirement planning alone are likely just causing themselves even more anxiety and stress.
“There are so many risks associated with retirement and investing. Some of these risks include taxes, market volatility, inflation, interest rates, and health care,” Sampson says.
“There seems to be too many to count. Don’t use internet searches to plan your retirement. You do not have to feel alone with your computer. There are people to help.”
He goes on to share that while time matters, it is never too late to start planning and working toward retirement.
“If saving is postponed, you will to need to increase the amount to save because you then have less time. Take that into account and get started, ideally with help. Even if it is not much, start saving today,” he says.
It is doable. It is possible. It is something to work toward today.