We usually tell people to save everything they can afford to stash away for retirement. But in some cases, people end up toiling away at their jobs for several years after they have saved plenty for retirement. Now, that’s fine if you really enjoy your job, but if you’re ready to retire soon then keep these things in mind.
Don’t become obsessed with the market. If anxiety provokes you to check the status of the market multiple times per day, try to relax. Constantly tinkering with your investments can actually backfire in the long run. Work with your financial advisor to create an investment plan that feels comfortable for you, and only review it every year or two. After careful consideration and planning, let go of anxiety and trust that your plan is a good one.
Don’t get too hung up on safe withdrawal rates. You have probably heard about the common rule of withdrawing 4 percent of your money to cover living expenses. But the 4 percent rule was based off of years of research on the market, spanning from the two World Wars to periods of high inflation, bear markets and bull markets, and everything in between! This may lead you to worry that you need to work longer and longer to ensure a comfortable income. Learn to be flexible with your spending instead, and keep in mind that the market does change. Don’t get too locked in on a fixed annual income.
Don’t burn yourself out. We tend to admire people who work overtime every week and stash as much money as possible. But if you focus too heavily on saving for retirement, you aren’t enjoying your life in the meantime! You could even burn out on your career so badly that you end up quitting earlier than you expected, complicating the plan you worked so hard to create!
The whole point of saving for retirement is so that you can achieve financial independence and enjoy your life. But try not to let it cause you so much worry in the meantime that you lose perspective on your present. Work with your financial advisor to create a comfortable retirement plan based on your goals and risk tolerance, and then try to let go of anxiety about your future.
14106 – 2015/2/13