Everyone wants to make the right decisions and be in control of the future. But life is full of uncertainties, and there is no better time than the present to realize that. Retirement is a big change. Here are five problems you can consider and possibly prepare for.
Financial regulation
If you don’t plan, you plan to fail. The same goes for organizing your money. Among the things mentioned in this article, organizing your finances is something you should do well before you retire. By getting your affairs in order before you retire, you will be better prepared for the choices you will have to make.
“The biggest problem retirees face is organizing their financial lives and finding a new purpose,” says Robert Riley, a finance faculty member at Providence College Business and a financial advisor at PRW Wealth Management in Boston. “If they haven’t done any formal financial planning yet, then replicating their old paycheck can be a daunting task. Most workers are used to a certain pay cycle and have a routine for paying their monthly bills. Sometimes it takes a lot of time and effort to re-budget and find new ways to pay for health care.” And other big bills.
It is normal to ask many questions when you retire. Organizing your finances is the best way to deal with the uncertainty of retirement.
The two primary questions asked by people anticipating their retirement are: “Am I going to do this?” and “Can I financially afford the lifestyle I have worked for my whole life?”. “None of these questions can be answered with the level of precision and confidence you need until you take the time to organize your thoughts about what it means to be a good retiree,” says Doug Dahmer, CEO and founder of Retirement Navigator in Burlington. Ontario. “Retirees dramatically reduce the amount of cash flow they can receive in retirement with a well-thought-out withdrawal strategy. The financial impact is often measured in the hundreds of thousands of euros. However, it is impossible to improve a retirement life plan that cannot be successfully funded and it is impossible to develop a financing strategy They retire strategically sound without understanding where the peaks and troughs are in annual expenses, so they must organize their thoughts and pre-test their expectations of their specific version of certainty that they will be “okay” in retirement.
Transition to a new lifestyle
Once you cross the retreat, you will find yourself immersed in a different stream. This isn’t the first time you’ve stepped into a completely new world, but it’s likely been a long time since you’ve had that experience. As mentioned above, the first challenge – or the first self-doubt – will have to do with money. But in the end, it is about your ability to live a new life.
“The main issues I face as a wealth advisor often cover multiple areas,” says Clint McCalla, senior wealth manager at LourdMurray in San Diego. “One of the main problems is not saving enough for the lifestyle the retiree wants. They just can’t do what they want to do. The other problem is boredom or a loss of purpose. I also see relationship problems emerging between loved ones, as they may be spending more time together, “And it’s an adjustment. People going through this transition need to be realistic about how quickly they’ll adjust to a new lifestyle. This won’t happen overnight. Take the time to think about it and don’t push yourself to meet the expectations you had when you retired.”
economic inflation
The most serious problem is usually the least expected. When he hits, he hits hard. This means that you are not prepared for it. This anxiety results. This concern may be justified or simply caused by your surprise.
“The biggest challenge people face in retirement is not accounting for inflation,” says Chris Kambetsis, a financial planner with the SKG team at Barnum Financial Group in Elmsford, England, N.Y. “They mistakenly think that the amount they will have to withdraw in the first year is the same as the amount they will have to withdraw in the tenth or twentieth year. People also greatly underestimate their expenses. On the contrary, they also tend to overestimate the amount they can Pull it safely out of the nest. »
Inflation, even when it subsides, will affect retirement. It’s one of the reasons why financial professionals advise you to keep a large portion of your retirement savings in long-term investments. This will allow your portfolio to grow even during retirement.
says Emily C., chief financial planner at Archer Investment Management in Charlotte, North Carolina. “I met a client who was afraid to start spending money when she had saved well and had enough money to cover current distributions and future expenses.”
Financial insecurity
All of the above issues can lead to the most annoying worry, financial insecurity. This feeling is not entirely negative, as it is a defensive tactic that can help protect you from the worst case scenario.
“Typically, people don’t have enough money to retire,” says Bob Chitrathorn, vice president of wealth planning at Simplified Wealth Management in Corona, California. “They are retiring and trying to make do with what they have.”
Many factors can exacerbate your concerns about money. Working out longer can exacerbate them (although it can also have benefits).
“The main issues facing retirees are financial insecurity, health issues and social isolation,” says Derek Miser, investment advisor and CEO of Miser Wealth Partners in Knoxville, Tennessee. Many people depend on their pension income to survive, and if that income decreases due to advancing retirement age, it can lead to financial hardship. Health problems often become more common in old age, and can be exacerbated by working longer hours. In addition, many people experience social isolation in retirement, as they may lose contact with co-workers and struggle to find new meaning in their lives. »
boring
Just because you’ve overcome money hurdles doesn’t mean you won’t have problems in retirement.
For example, do you know the answer to this question? “What is the meaning of your life?”
Finding the right answer for you is easier than you think. However, few people devote the necessary time and effort to meditation. The lack of purpose becomes more apparent once you retire.
“The main problems people face in retirement depend on the situation,” says Anna Rappaport, a member and volunteer with the Society of Actuaries of Chicago. “For example, some people have major financial problems, others don’t; some have depression and boredom. People need to contribute and have a purpose in life. If their main goal is their job, they need to find a new passion and/or purpose.” In addition, many people retire without choosing to, either because of occupational issues, health problems, or because their families need them as caregivers.”
These non-financial problems can be more harmful than problems related to the financial side of your life. Fortunately, they can be treated in the same way.
“Retirement can be challenging for many, and it’s a rather outdated concept,” says Lawrence Sprung, founder of Mitlin Financial in Hauppauge, New York. “This concept was developed at a time when life expectancy was much lower. People who retire early can miss a great deal of purpose, making them unhappy and suffering from mental health issues. Just as you plan your retirement financially, you also need to plan for it.” mentally.”
Don’t underestimate missing a target. During your career, you’ve had a regular schedule. You may think that it has given meaning to your life. That all changes in retirement.
“One of the biggest problems retirees face is a lack of purpose and meaning in their lives,” says Denis Cherchikov, chief growth officer at Awning.com in New York and a professor at the City University of New York, where he teaches. Finance, economics and accounting. Many retirees experience boredom, loneliness, and isolation, which can lead to depression and other mental health issues. »
Whether it’s financial problems or mental hurdles, retirement is a challenge. Are you ready to take on this challenge? What will you do to meet these challenges? There are answers you can consider.
Article translated by Forbes USA – Author: Chris Carossa
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