Will I have enough money in retirement?
This is one of the most common concerns my clients come to me with.
The fear of not having enough is a valid one. That’s why retirement saving is one of people’s most important financial goals.
The idea, in theory, is to spend your working years growing your assets so that you can enjoy spending what you’ve earned in your retirement years.
As it turns out, this isn’t what happens in many cases.
In a survey by the Society of Actuaries in 2020, over half of retirees surveyed planned to either maintain or grow their assets in retirement. Not spend—GROW.
In a different study, these plans proved to be astonishingly accurate: nearly one-third of surveyed retirees had maintained or grown their assets, not dwindled them down.
But why?
Do they want to leave a legacy to their family’s next generation?
Are they worried about expensive long-term care or other unknown costs?
Does saving just… make them happy?
All of the above!
If your motivation is the satisfaction of saving, then there is nothing wrong with that! Wealth is a form of emotional security. Its purpose is to support your lifestyle and well-being. If you can save while growing your assets during retirement—more power to you!
If your motivation is to leave a legacy for your family, there is honour in that! But there is no need to be stingy with yourself in retirement. Talk to your Certified Financial Planner® about options that can maximize the legacy you leave the next generation—without requiring you to be Scrooge while you’re alive!
But if your motivation for saving and focusing on growing wealth is based on fear—that is a problem.
Even if they meet or exceed their financial goals, it will never be enough for some. They will live with the nagging worry of “what if?” in their mind. What if their portfolio values crash? What if the economy tanks? What if something terrible happens to them, and they need round-the-clock nursing care?
It’s true that part of having a financial plan is to meet or exceed your financial goals. But the other, equally important part is alleviating some of those pesky “what if?” concerns.
What if the market crashes? Well… what if it does? What would you have to do?
Your financial plan can include scenarios like this, so you can actually see how things would play out. With a well-diversified portfolio, you’d likely not lose it all, but you’d have to adjust. What would you have per month, and how could you make that work?
What if something terrible happens to you, and you need round-the-clock nursing care? Well… what if it does? If your financial plan includes the right types of insurance, you’ll have peace of mind that you won’t be a financial burden to your family.
With a robust financial plan, you can alleviate some of these concerns with logistical answers before they even happen.
But here’s the thing: no magic number will protect you from everything.
Worrying about and planning for every possible scenario isn’t productive, and certainly isn’t possible!
But what you can control, and what your financial plan should account for, is your investment diversity, contributions, insurance, and budget.
After saving most of your life, shifting to a “spend” mentality can be difficult and nerve-wracking. But working with a financial planner means you have someone who can ease any anxiety with hard numbers and projections.
If you want to work with a financial planner who can help you reach your retirement savings goals and overcome the "what if?" fear, book a call.