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Yahoo
25-05-2025
- Business
- Yahoo
More Scared of Going Broke Than Dying? 9 Ways To Beat Retirement Anxiety
Most people don't like thinking about death but for many, the idea of running out of money in retirement is even scarier. A new study from Allianz Life found that 64% of Americans feel stressed about the possibility of outliving their savings, a fear that cuts across age groups and financial backgrounds. Janeil Pierre, an accredited financial counselor and the author of 'The Money Confidence Code,' said it's not just a fear rooted in financial hardship, but 'the emotional and psychological toll of watching one's quality of life decline after decades of work.' Pierre and other experts offer some tips to beat this anxiety by being prepared. Check Out: Read Next: Clarity is the first step, Pierre said. 'Define what a financially secure future looks and feels like for you. Do you want to travel, downsize, support family or simply maintain your current lifestyle? Having a clear vision provides a foundation for action.' Robert R. Johnson, PhD, a certified financial analyst and professor of finance in the Heider College of Business at Creighton University, refers to this as 'a roadmap,' or an 'investment policy statement' (IPS), a tool that 'takes into account the investor's time horizon, risk tolerance, goals and objectives and unique circumstances. An IPS is unique to an individual.' Once that's in place, calculate your retirement needs, create a plan, automate your savings and regularly check your progress. The more intentional you are, the more empowered you'll feel, Pierre suggested. See More: Another approach is to work backward, Johnson said. 'That is, they need to establish a budget in retirement and calculate how much they need to save and invest to achieve that goal.' Using a reliable online calculator, such as the one on or Fidelity, can help, Pierre added. 'Aim to replace 70%-80% of your pre-retirement income annually in retirement; personalized tools will give you a clearer picture,' she said. Knowledge replaces fear. Additionally, determine a realistic budget, Johnson said. 'Oftentimes, people underestimate their expenses in retirement.' Guaranteed income sources, such as Social Security, pensions or certain types of annuities, can provide peace of mind due to their stable and predictable cash flow, regardless of market conditions, Pierre said. 'Knowing you have a fixed amount coming in each month helps cover non-negotiable expenses and reduces dependence on investment withdrawals during market downturns.' Johnson warned, however, that while Social Security may be consistent or reliable, it's likely not enough to retire on for most people. Pierre pointed out that 'money is a mindset long before it's just numbers. A person's beliefs about money directly impact their relationship with it and the reality they experience.' She urged retirees to stop viewing money as something to fear and start seeing it as a tool. 'Fear often arises from not knowing your numbers or feeling ashamed of your past decisions. However, your financial data is just that — data. It tells a story, but it doesn't define your future.' One of the the most significant expense in retirement, and one of the least predictable, is healthcare, Pierre pointed out, so pre-retirees should: Contribute to a Health Savings Account (HSA) if eligible, as it offers triple tax advantages. Estimate healthcare costs realistically. A 65-year-old couple retiring today may need upwards of $300,000 for healthcare in retirement, according to Fidelity. Consider long-term care insurance, especially if there's a family history of chronic illness. Include healthcare premiums, deductibles and out-of-pocket expenses in your retirement budget. Grasping your safe withdrawal rate is very important, as well, Pierre said. 'Withdraw no more than 4% of your retirement portfolio annually, as a starting point. However, it's wise to personalize that amount based on your lifestyle, inflation and market performance.' Retirees may also want to opt for bucketing strategies, where your money is segmented into short-, medium- and long-term needs, can help avoid overspending and hoarding cash out of fear. 'The more visibility and structure you have, the more confidently you can spend,' Pierre said. Working part time or postponing full retirement can alleviate financial pressure and anxiety, depending on a person's overall situation and needs, Pierre said. 'Engaging in part-time work can also provide structure, purpose and social connection, all essential for emotional well-being in retirement,' she pointed out. Pierre recommended a few key habits that can make sure you're on track for retirement: Conducting annual or semi-annual financial reviews to check progress and adjust for new life events. Working with a financial planner or retirement coach to get personalized guidance. Using a retirement tracking app, such as Personal Capital or Empower, to stay informed on net worth, income projections and expenses. Creating a written retirement plan, including income sources, withdrawal strategy, healthcare costs and legacy planning. These habits foster confidence, clarity and a sense of control, replacing fear with strategy. Don't just save — make your money work harder for you, according to Cetin Duransoy, CEO at Raisin GmbH. 'Not all bank accounts are created equal. You can prioritize safe, guaranteed investments like CDs and high-yield savings accounts to earn interest and fight inflation,' he said. Even modest amounts can grow meaningfully over time when placed in competitive, insured savings products, and that kind of consistency is key in a high-cost environment. Overall, remember there are easy ways to improve your financial footing if you know where to look, and every adjustment now helps protect your retirement goals later. Most importantly, don't panic — strategize. More From GOBankingRates 5 Cities You Need To Consider If You're Retiring in 2025 How Much Money Is Needed To Be Considered Middle Class in Every State? This article originally appeared on More Scared of Going Broke Than Dying? 9 Ways To Beat Retirement Anxiety
Yahoo
25-05-2025
- Business
- Yahoo
More Scared of Going Broke Than Dying? 9 Ways To Beat Retirement Anxiety
Most people don't like thinking about death but for many, the idea of running out of money in retirement is even scarier. A new study from Allianz Life found that 64% of Americans feel stressed about the possibility of outliving their savings, a fear that cuts across age groups and financial backgrounds. Janeil Pierre, an accredited financial counselor and the author of 'The Money Confidence Code,' said it's not just a fear rooted in financial hardship, but 'the emotional and psychological toll of watching one's quality of life decline after decades of work.' Pierre and other experts offer some tips to beat this anxiety by being prepared. Check Out: Read Next: Clarity is the first step, Pierre said. 'Define what a financially secure future looks and feels like for you. Do you want to travel, downsize, support family or simply maintain your current lifestyle? Having a clear vision provides a foundation for action.' Robert R. Johnson, PhD, a certified financial analyst and professor of finance in the Heider College of Business at Creighton University, refers to this as 'a roadmap,' or an 'investment policy statement' (IPS), a tool that 'takes into account the investor's time horizon, risk tolerance, goals and objectives and unique circumstances. An IPS is unique to an individual.' Once that's in place, calculate your retirement needs, create a plan, automate your savings and regularly check your progress. The more intentional you are, the more empowered you'll feel, Pierre suggested. See More: Another approach is to work backward, Johnson said. 'That is, they need to establish a budget in retirement and calculate how much they need to save and invest to achieve that goal.' Using a reliable online calculator, such as the one on or Fidelity, can help, Pierre added. 'Aim to replace 70%-80% of your pre-retirement income annually in retirement; personalized tools will give you a clearer picture,' she said. Knowledge replaces fear. Additionally, determine a realistic budget, Johnson said. 'Oftentimes, people underestimate their expenses in retirement.' Guaranteed income sources, such as Social Security, pensions or certain types of annuities, can provide peace of mind due to their stable and predictable cash flow, regardless of market conditions, Pierre said. 'Knowing you have a fixed amount coming in each month helps cover non-negotiable expenses and reduces dependence on investment withdrawals during market downturns.' Johnson warned, however, that while Social Security may be consistent or reliable, it's likely not enough to retire on for most people. Pierre pointed out that 'money is a mindset long before it's just numbers. A person's beliefs about money directly impact their relationship with it and the reality they experience.' She urged retirees to stop viewing money as something to fear and start seeing it as a tool. 'Fear often arises from not knowing your numbers or feeling ashamed of your past decisions. However, your financial data is just that — data. It tells a story, but it doesn't define your future.' One of the the most significant expense in retirement, and one of the least predictable, is healthcare, Pierre pointed out, so pre-retirees should: Contribute to a Health Savings Account (HSA) if eligible, as it offers triple tax advantages. Estimate healthcare costs realistically. A 65-year-old couple retiring today may need upwards of $300,000 for healthcare in retirement, according to Fidelity. Consider long-term care insurance, especially if there's a family history of chronic illness. Include healthcare premiums, deductibles and out-of-pocket expenses in your retirement budget. Grasping your safe withdrawal rate is very important, as well, Pierre said. 'Withdraw no more than 4% of your retirement portfolio annually, as a starting point. However, it's wise to personalize that amount based on your lifestyle, inflation and market performance.' Retirees may also want to opt for bucketing strategies, where your money is segmented into short-, medium- and long-term needs, can help avoid overspending and hoarding cash out of fear. 'The more visibility and structure you have, the more confidently you can spend,' Pierre said. Working part time or postponing full retirement can alleviate financial pressure and anxiety, depending on a person's overall situation and needs, Pierre said. 'Engaging in part-time work can also provide structure, purpose and social connection, all essential for emotional well-being in retirement,' she pointed out. Pierre recommended a few key habits that can make sure you're on track for retirement: Conducting annual or semi-annual financial reviews to check progress and adjust for new life events. Working with a financial planner or retirement coach to get personalized guidance. Using a retirement tracking app, such as Personal Capital or Empower, to stay informed on net worth, income projections and expenses. Creating a written retirement plan, including income sources, withdrawal strategy, healthcare costs and legacy planning. These habits foster confidence, clarity and a sense of control, replacing fear with strategy. Don't just save — make your money work harder for you, according to Cetin Duransoy, CEO at Raisin GmbH. 'Not all bank accounts are created equal. You can prioritize safe, guaranteed investments like CDs and high-yield savings accounts to earn interest and fight inflation,' he said. Even modest amounts can grow meaningfully over time when placed in competitive, insured savings products, and that kind of consistency is key in a high-cost environment. Overall, remember there are easy ways to improve your financial footing if you know where to look, and every adjustment now helps protect your retirement goals later. Most importantly, don't panic — strategize. More From GOBankingRates 10 Cars That Outlast the Average Vehicle Are You Rich or Middle Class? 8 Ways To Tell That Go Beyond Your Paycheck This article originally appeared on More Scared of Going Broke Than Dying? 9 Ways To Beat Retirement Anxiety Sign in to access your portfolio
Yahoo
25-05-2025
- Business
- Yahoo
Saving Every Dollar for Retirement Is Just Silly — Why You Should Spend on Enjoying Life Now
Saving for retirement is important, of course, but saving every spare dollar for that purpose can actually create imbalance, 'especially when it starts to rob your present life of joy, meaning or opportunities for growth,' according to Melissa Murphy Pavone, a financial planner at Mindful Financial Planners. Read Next: Find Out: There are other considerations that should go into thinking about how you spend for the future and for today. Pavone and Robert R. Johnson, PhD, a certified financial advisor and professor of finance in the Heider College of Business at Creighton University, suggested you have to be flexible and strategic in approaching your spending. The big challenge for any person who has enough financial stability to both save for the future and spend leisurely in the present is how to balance that. Johnson pointed to the study of behavioral finance, which shows that 'human beings aren't rational profit maximizing machines but often succumb to behavioral biases.' One of the biggest behavioral biases, of course, is the bias toward immediate gratification over delayed gratification, he said. Because so many people tend to struggle to 'imagine their future self and give up that vacation or new car today in lieu of having money to retire on in the distant future,' most financial advice urges people toward doing the more diligent thing. However, Johnson pointed out 'the same can be true in reverse if one doesn't enjoy life in the present state and sacrifices current pleasures for future pleasures. The result can be mentally debilitating.' Be Aware: Pavone agreed. She has worked with people who are 'maxing out every retirement account but feel burnt out, disconnected from their families or frustrated because they're missing out on meaningful experiences.' Her advice is that, if you're always living in a 'someday' mindset, you might miss the very moments that make life rich. Pavone said it's best to strike a balance between 'living well today and being prepared for tomorrow.' That balancing act of 'honoring your past, investing in your future and living mindfully in the present,' is what most investors need to navigate. The goal of a thoughtful financial life isn't just to retire early, it's to live fully at every stage, Pavone said. 'That means aligning your investments, both financial and emotional, with what truly matters to you.' So long as you are financially stable, and have the luxury of extra dollars to spend, Pavone suggested you ask yourself the following questions. What do you value most right now? What brings you joy, purpose or peace? What are your biggest fears and are you trying to out-save them? The trick is determining how to tie available discretionary income to these questions without sacrificing future goals. Pavone uses a strategy she called 'financial modeling' to create 'permission' for intentional spending today without jeopardizing retirement security. 'Often, it's not a matter of either/or, it's about setting boundaries, creating margin and making sure the right dollars are going to the right places,' she suggested. This often looks like building in 'fun funds' or 'lifestyle reserves' into retirement models, so spending on joy is planned, not guilt-inducing. An area where spending now can pay big dividends later is on health and fitness, Johnson said. 'If one can improve their physical fitness, it can lead to better health in retirement and require less spending on healthcare in retirement,' he said. Additionally, though it might not seem as 'fun,' Johnson said that establishing a relationship with a qualified and credentialed financial advisor 'can be money well spent' because it helps you determine if you're on the right financial path. Living well today doesn't mean sacrificing your future, if you plan with intention. A balanced financial life makes space for both smart investing and meaningful spending. More From GOBankingRates These 10 Used Cars Will Last Longer Than an Average New Vehicle Sources Melissa Murphy Pavone, Mindful Financial Partners Robert R. Johnson, Creighton University This article originally appeared on Saving Every Dollar for Retirement Is Just Silly — Why You Should Spend on Enjoying Life Now
Yahoo
06-05-2025
- Business
- Yahoo
How To Stop Budgeting Like the Middle Class and Do What the Rich Do Instead
A lot of people believe all they need to do to become wealthy is to earn more money or to save what they do have. This isn't all that surprising, considering how many people subscribe to the idea that their income directly corresponds to their wealth. Find Out: I'm a Self-Made Millionaire: 6 Steps I Took To Become Rich on an Average Salary For You: The New Retirement Problem Boomers Are Facing But what many people who are considered 'middle class' don't realize is that earnings are just one part of the bigger picture. The people who achieve true wealth are those who know how to spend and invest the money they earn in ways that will benefit them in the long run. If you've been living with a middle class mindset and want to make a change, you might need to take a moment to consider the behaviors or actions that keep you from becoming rich. Here are some of the most common things people in the middle class tend to do that the rich do not — and things the rich consistently do to maintain their wealth. The Rich Invest While the Middle Class Do Not The middle class tend to save their money, while the wealthy invest theirs. Robert R. Johnson, Ph.D., CFA and professor of finance at Heider College of Business at Creighton University, gave a historical look at the stock market. 'From 1926 through 2022, the stock market provided returns that far exceeded treasury bills or treasury bonds,' he said. 'According to data compiled by Ibbotson Associates, large capitalization stocks — think S&P 500 — returned 10.1% compounded annually. Over that same time period, long-term government bonds returned 5.2% annually and T-bills returned 3.2% annually.' He went on, 'To put it in perspective, a dollar invested in the S&P 500 at the start of 1926 would have grown to $11,535 (with all dividends reinvested) by the end of 2022. That same dollar invested in T-bills would only have grown to $22.05. That same dollar invested in long-term government bonds would have only grown to $130.89. It pays to invest and not simply save. And it's not a close call.' Justin Albertynas, CEO of RatePunk, added, 'Wealthy individuals also prioritize long-term investing strategies. They are more likely to hold onto their investments, benefiting from compound growth over time. According to a study by Spectrem Group, 75% of millionaires in the US attribute their wealth to long-term investing.' Be Aware: Suze Orman Says If You're Doing This, You're 'Making the Biggest Mistake in Life' Middle Class Individuals Rarely Have Multiple Income Streams You've heard it before, but it bears repeating: Having multiple income streams is essential to building wealth. And not just building it, but maintaining it. After all, if one source of income fails, you still have the others to fall back on.
