Baird’s Retirement Guide for Women | Page 5

What Keeps You Up at Night ?

While everyone has their own definition of what a perfect retirement means to them , they typically share a few common themes – more leisure time , less stress , the financial freedom to pursue opportunities you couldn ’ t when you were younger . But for many , achieving that degree of freedom also involves a lot of sleepless nights , especially when you reach middle age and the prospect of retiring feels more palpable . Some of the questions you might be asking yourself include :
• “ Will I have enough to retire ?” When thinking about how much you put away or invested for retirement , it ’ s easy to self-recriminate and wish you started sooner . ( Once you ’ re retired , this anxiety is often restated as , “ Will I outlive my money ?”)
• “ When am I going to retire ?” Are you afraid you ’ re drawing down your retirement savings too early ? Or what if you push off retiring : Will you have enough time , energy and mobility to still create the retirement you want ?
• “ Am I spending too much ?” According to data from the Consumer Financial Protection Bureau , roughly half of retirees do not have the assets to maintain their preretirement level of spending five years into retirement . 3 Spending habits are exactly that – habits – and a lot of new retirees struggle to break their old spending habits once in retirement .
• “ Am I saving too little ?” The uncertain future of Social Security and skyrocketing costs of healthcare have put a premium on the need to build and maintain adequate savings .
• “ Is my portfolio growing quickly enough ?” It ’ s important to get the investment risk / return ratio right . Too much risk in your portfolio increases the likelihood that a downturn in the market could significantly set back your plans . But if you ease off the gas too soon , you risk not generating enough return to support you in your later years .
• “ What about my loved ones ?” If there are people who rely on you for support , it ’ s worth asking if you ’ ll be able to provide that support in retirement . It ’ s also worth considering your own needs – who would you turn to if you needed care ?
• “ What if there are surprises I ’ m not ready for ?” As the saying goes , the best laid plans often go astray . A downturn in the market , an unexpected opportunity , a loved one in need – having financial flexibility could make an enormous difference in creating the retirement you want .
The truth is , it ’ s natural to feel some uncertainty over retirement planning . While all financial goals have some degree of the unknown , the risks are greater when you need to plan for decades of life , typically with little or no income to cushion an unexpected setback . That said , just because so much is unknown doesn ’ t mean you can ’ t retire with confidence . You just need to be forward-thinking and establish a plan .
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