How to Avoid Financial and Psychological Stress in Retirement Planning

Business.com / Finances / Last Modified: February 22, 2017

It seems as though retiring should be more painless than ever, but that's hardly the case. Here's how to avoid retirement planning stress.

These days, it seems as though retiring should be more stress-free, simple and painless than ever; but in some ways, it can be more stressful than it has ever been.

Did you know that 60 percent of employees are burdened by financial stress? And that among American women, only 15 percent believe they are putting away enough money for retirement, with 22 percent say they are barely setting aside money at all. Did you know that 91 percent of couples find reasons to avoid discussing finances altogether because it’s such a stressful topic?

The income gap seems to keep widening, which is becoming more problematic for those soon to retire. This is all a far cry from the way retirement has worked throughout the years. Back during colonial times, retirement wasn’t a thing anyone did. You worked until death, and life expectancy wasn’t high.

In the following pre-depression era, retirement evolved as a way to have older workers move on from factory life for efficiency purposes. Retirement continued to rise post-depression era, social security was created in 1935; and from then on, the number of people with pensions continued to rise. Soon, those over the age of 65 will be a large group, taking up 20% of the population. Studies have shown that if you don’t retire in the proper way, it can have an adverse effect on your health.

It’s easy to get into a negative mindset about retirement, but it doesn’t need to be this way. Here are some simple tips and tricks you can utilize in order to avoid excess stress during your retirement, enabling you to focus on what’s most important, the next wonderful chapter of your life.

Related Article: It's Never Too Early: When to Start Saving for Retirement

1. Start Planning Early

Honestly, it’s never too early to begin to plan for your retirement. The earlier you begin, the more time you will have to accrue your savings, and maximize your retirement funds.

When you begin to plan earlier, planning for retirement already becomes easier and more manageable because when you’re younger, you have fewer restrictions and responsibilities; giving you more of a chance to build up a better “nest egg” for when you’re older.

2. Don’t Over-Plan

Although planning early is important, it’s also good to resist the urge to over-plan for your retirement. Waking up every day with planning for retirement as the first thing on your mind can set a negative tone for your day, leading to a more stressful day rather than a productive or relaxing one.

Set aside appropriate time to plan for your retirement, and when everything is set, do what you need to do, then focus your time on other things, like spending quality time with your friends, family, or spouse.

Related Article: What Can a Retirement Consultant Do For Your 401(k)?

3. Keep Busy

Many people report that one of the biggest forms of stress during and after retirement is losing a sense of purpose during their day-to-day lives, because they aren’t quite busy enough. Lack of involvement in hobbies or community oriented activities can cause depression to develop. Have you always wanted to volunteer or garden, but lacked the time?

There’s no better time than your retirement to get involved with things you’ve always wanted to do. This leads to positive physical and mental health, which is incredibly important when you retire.

4. Reinvesting and Diversifying

The majority of financial experts agree that it isn’t in your best interest to let money stagnate in your bank account for a long period. If you are interested in investing, it’s important to find a good financial adviser who will help you figure out the best plan of increasing your financial gain. It’s also important to note that as you draw money from your 401k account, you will need to pay taxes.

Since these can be high, it’s beneficial to you to figure out how to decrease those tax expenses. IRAs and 401ks are also influenced by the financial market, which isn’t always reliable. If you spread out your money by investing, it can help to offset the financial consequences of the current market.

Follow these tips, learn to relax, plan ahead, and make the most of your retirement. Post-retirement time is the best time to enjoy your life fully. You’ve worked hard, and you earned it!

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