Retirement anxiety is an emotion of concern or worry, experienced by people yet to retire, about the prospect of retirement. Examples include concerns about how they'll fill their time, financial worries and feeling a loss of identity.
It's normal to feel a little anxious about retirement. After all, it's a big life change. But if your retirement anxiety is starting to take over daily life, it's time to take a closer look at what's causing it.
The coziness of a structured, scheduled life was suddenly gone and it took a few months to find focus. It's called “retirement culture shock.” There are many reasons for people to experience retirement culture shock. Some people love their jobs and the thought of leaving it and their coworkers behind is difficult.
1. The Greatest Retirement Fear: Running Out of Money.
These tips can help. As saving for retirement has become more of an individual obligation, many workers and retirees wonder if they have enough money saved. New research shows the biggest concern among those cohorts is outliving their assets.
Follow the 3% Rule for an Average Retirement
If you are fairly confident you won't run out of money, begin by withdrawing 3% of your portfolio annually. Adjust based on inflation but keep an eye on the market, as well.
The 4% rule is a popular retirement withdrawal strategy that suggests retirees can safely withdraw the amount equal to 4 percent of their savings during the year they retire and then adjust for inflation each subsequent year for 30 years.
You may grieve the loss of your old life, feel stressed about how you're going to fill your days, or worried about the toll that being at home all day is taking on your relationship with your spouse or partner. Some new retirees even experience mental health issues such as depression and anxiety.
Depression after retirement is also common. It's estimated that almost one-third of retirees in the United States develop symptoms of depression at this stage of life. Managing depression is possible, though, and self-care and support can make a difference.
Your 60s: Think about what's next, and adjust accordingly
If you're behind in your savings, it's time to start assessing the lifestyle you want and the living expenses you'll pay after you stop working. Make plans to delay your Social Security benefits until age 70.
According to research from the National Institute on Aging in Washington, D.C., retirement after decades of being in the workforce can also be accompanied by anxiety, a low-level depression and even a sense of boredom, all of which can be expressed as fatigue.
In the first year of retirement, you can withdraw up to 4% of your portfolio's value. If you have $1 million saved for retirement, for example, you could spend $40,000 in the first year of retirement following the 4% rule.
The last five years before you retire may be a critical point of time—at least when it comes to retirement planning. That's because you must determine whether you truly can afford to quit work within that period of time.
This is also not accounting for rising costs due to inflation, large, unexpected costs and taxes. On the other hand, if they're able to continue to live this affordably, they can estimate their $300,000 in savings will last approximately 25 years.
Diversifying Investment Vehicles
Most retirees never regret planning ahead for retirement to meet their goals and investing early to reap the benefits of compound interest. Another money move retirees seldom regret is diversifying their savings and investment vehicles.
Use the following signs to determine if you're saving too much for retirement: You're unable to cover basic living expenses. You have too much debt. You have no financial plan.
Instead of withdrawing money from retirement assets as needed, 63% said they'd prefer an automatic paycheck in addition to Social Security (i.e., an annuity). Retirees aren't feeling very secure — just 27% said they were “very confident” about having enough money to last them through retirement.
Among those looking ahead to retirement, many expect to step away from work at age 65, according to the 2023 Retirement Confidence Survey. Although 65 is the anticipated median retirement age, workers report retiring at a median age of 62, the survey found.
It's recommended that most couples save at least seven to eight times their combined annual income to retire comfortably. This number may seem daunting until you remember that savings compound over time.