Retirement Doesn’t Have to Be Scary

Natalie Merrill
October 20, 2016

While many individuals think about their retirements and carefully plan for their futures after they leave the workforce, there are still certain fears present when they think about life after employment.

The 2016 mid-year AICPA CPA Personal Financial Planning Trends Survey revealed that the biggest concern clients have regarding retirement is running out of money — 41 percent of survey respondents cited it as the top concern, while 70.4 percent identified it in their top three client concerns.1 Individuals wonder if they have saved enough before retirement, whether they will be able to spend efficiently and afford the lifestyles they want, and if there’s the chance they will outlive their money.

While the worry of not having enough money during retirement has been consistent for years, it has become more prevalent recently as more of the baby boomers — who hold the greatest amount of retirement assets — are supporting both their parents and children and having to concern themselves with the necessities of retirement at the same time.2 This then combines with the possibility that future unexpected health issues on top of general living costs will exhaust all savings that are supposed to sustain an individual’s lifestyle through retirement.

Healthcare can be expensive at any age, but it can certainly be a daunting factor to account for when thinking about retirement and having enough money to cover any health issues — whether minor or major — one may eventually face. We cannot definitively predict what the requirements for medical insurance and what out-of-pocket costs will be in the future, which means individuals need to be financially prepared enough to be able to meet those costs during their retirement years.

Preparation also includes additional aspects unrelated to physical well-being, such as the state of the economy. Changing tax policies and inflation have the potential to produce unwanted fears within individuals thinking about retirement, as these unexpected factors can indeed play a key role in determining how far a person’s funds will last when he or she is not living off the steady income the individual was accustomed to for the extent of his or her career.

There are many additional concerns individuals have regarding retirement that are more personal than financial (e.g., not having enough social interaction with others, going through a culture shock of no longer working, becoming bored with the extra time, etc.), but the underlying apprehension of not having the means to afford all one wants during retirement can be overwhelming and intimidating to an individual who doesn’t feel as prepared as he or she may have originally thought.

The fear of running out of money during retirement doesn’t have to become a reality, though. Properly planning and preparing for both the known and unknown facets of the future will not only help to ensure your retirement will be in line with what you’ve always hoped it would be, but it will also help in calming some of the anxieties you might have about not having enough money to cover all of the expenses — for both necessities and desires — that will be there during your years as a retiree.

1 2016 mid-year AICPA CPA Personal Financial Planning Trends Survey: Key Findings
2 Lea Hart, “Americans’ biggest retirement fear: running out of money.” Journal of Accountancy, October 2016.

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