It’s true: you may lack retirement confidence

Practice makes perfect, but what about in retirement? 

Confidence comes from that which we repeatedly do- also known as practicing. But it’s very difficult to practice retirement. It’s even harder to find planners with first hand experience to help you along. Over the years I’ve learned a lot about the retirement mindset. I’ve come to understand a few key reasons why people enter retirement feeling less confident than they should. 

The habit of saving, and learning to do the opposite

You’ve spent a lifetime learning how to sacrifice so you can save. You made tough decisions on what to forego, and when you indulged in travel or enjoyment, you always found ways to save. 

Habits are powerful ways to create consistency and reach goals. The trouble is, retirement asks you to do the opposite of saving, and spend instead. A lot of people aren’t ready for this. It’s tough to turn the dial 180 degrees and go against what you’ve been doing for 30-40 years. Old habits die hard, as they say.

Getting used to the pile getting smaller 

These habits meant being diligent about saving, investing smart, and paying down your mortgage. The result was that you watched your wealth continue to grow, and it likely grew the most in the last decade before retirement. 

Many retirees idealize a plan that allows them to spend only the growth on their investments and leave their original capital. This approach can work, but it typically results in oversaving:  essentially you die with the same amount of money you started with in retirement. 

So why do so many people make this the goal? The simple answer is that it’s hard to see your investments decrease, especially if it’s because you’ve spent on things you enjoy (something your pre-retirement brain may have seen as frivolous). 

Other stakeholders can get in the way

As much as you struggle to see your investments decrease, there are other stakeholders that don’t want this to happen either: your investment companies and advisors. Typically they’re paid fees behind the scenes, and those fees are based on the size of your portfolio. A decrease in your portfolio means a decrease in their income, which doesn’t interest them a great deal. 

Retirees often lack a true retirement plan

Everyone’s ideal in this phase of life is different. Some want to travel, some want to help their kids buy a home, others want to go to school to learn something new. But many retirees lack a well-structured plan that is geared toward these goals. Regardless, structuring your portfolio to reduce the impact of market fluctuations, and then implementing things in ways that allow you to spend with confidence, is the key. 

And it’s at the heart of what I do. My approach to retirement planning is based on helping reduce the fear of your savings running out. I’ll take the time to understand where you want to spend your money in retirement, and use cash flow mapping to show you how we’ll keep the lights on for as long as you need.

I’ve met a lot of people who tell me they wish they’d done more in retirement. I don’t want that story to be yours. Your retirement is the reward for a lifetime of saving. I want you to be able to experience that reward with all the confidence in the world.