Retirement Terrified?

Go From Fear to Financial Confidence

Some say, “I’ll never retire.” Others say, “I need to put off retirement.” However, the reality is that most people end up retiring earlier than they expected because of health issues or the changing job environment. But if retirement is supposed to be the “golden years,” why do so many people avoid it? The answer: the price tag.

To retire, most people will need 70% to 90% of their pre-retirement income. Let that sink in—if you’re earning $63,000 annually today, you’ll need between $44,000 and $57,000 each year during retirement. That might paint a bleak picture, but there’s also promise.

In reality, the median retirement account balance for households ages 55 to 64 is just $185,000 (Federal Reserve Board, 2022). That’s depressing to many people because they’ve been told for years that they need a million dollars to retire. So they say they’ll either put it off or never retire.

But here’s good news – it’s never too late to start. Whether you’re 33 (the average age of first-time investors) or nearing retirement age, you can still build an effective retirement strategy.

In this retirement planning guide, I’ll provide a clear roadmap to shift your retirement outlook from insecure to in control. We’ll explore practical ways to plan for retirement, addressing important concerns like medical expenses – one of the biggest financial challenges for retirees.

Are you ready to take control of your retirement future? Let’s begin this journey together.

Recognizing Financial Insecurity

Have you ever driven on Interstate 10 across Louisiana? Between Baton Rouge and Lafayette, there’s a bridge that goes across the Atchafalaya Swamp. It’s over eighteen miles long, so you must ensure you have enough gas before you start, or you’ll end up on the side of the road looking over the edge at the snakes and alligators! FYI, for those EV drivers, you’d better stop about 20 miles before the Atchafalaya Basin Bridge in Baton Rouge.

For many people, retirement is like starting across the Atchafalaya Swamp with the fuel gauge close to empty. They just don’t know how they’re going to make it. If you can relate, this worry isn’t without merit. Let’s look at the reality of why retirement fears persist and how to tell if your retirement strategy needs a pit stop.

Common fears about retirement

Retirement anxiety comes from several legitimate concerns. The fear of outliving savings tops many people’s list, particularly with today’s longer life expectancies. What’s more, inflation, tariffs, and the economy have deepened their retirement worries.

There are four specific areas you need to know about and plan for:

Healthcare costs: 66% of Americans worry about rising healthcare expenses in retirement, which can quickly drain savings without proper retirement planning (Doonan & Kenneally, 2024). Don’t expect Medicare to pay for everything—it won’t. Even if you have an Advantage Plan or traditional Medicare with a supplement, you need to plan for medical expenses that those plans won’t cover.

Housing expenses: 75% of respondents worry about affording housing during retirement (Doonan & Kenneally, 2024).

Daily assistance: 66% worry about covering costs for everyday help like cleaning and cooking as they age (Doonan & Kenneally, 2024).

Long-term care: 60% of adults would be unable to afford two years of in-home long-term services (Basel et al., 2023).

If you don’t plan for these four areas, you’re back to starting that drive across the swamp of retirement on empty.

Let’s flip the script a little. Say that healthcare and housing aren’t big worries. Beyond money concerns, ask yourself what you’re going to do now. Many pre-retirees fear boredom, especially those whose identity came from successful careers.

Signs you need a retirement plan

If you find yourself questioning your money situation or your happiness with an impending retirement, an honest self-assessment will help. Ask yourself these key questions: Are you carrying substantial debt into retirement, whether credit cards, mortgages, or car loans? Are you still financially supporting children or elderly parents?

If you’re worried about what to do when you retire, what are you doing now outside of work to bring purpose to your life? One misconception about retirement is that it will be filled with travel and all the things you couldn’t do during your working years. Yes, you can have mountaintop moments, but not every day. You have to plan for the average day of just being a retired person.

Financial security and happiness don’t happen by chance.

The Insecure to In Control Transformation

Transforming retirement anxiety into empowered action requires more than wishful thinking. Studies show that people who set specific retirement goals are much more likely to achieve the retirement they want, rather than simply experiencing “the retirement that shows up.” Let me show you how to make this vital shift from uncertainty to confidence.

How to shift from fear to action

It may seem odd to make this comparison, but what Yoda described in Star Wars pertains to retirement today. Yoda famously said, “Fear is the path to the dark side. Fear leads to anger, anger leads to hate, hate leads to suffering.”

Think with me. Today, you know that fear may motivate you at the start of retirement planning. But over time, fear changes to anger. You’ll either be angry with yourself for not saving enough, or with your situation for not being able to save enough, or with the government for the way it runs Social Security. That anger may likely lead to hate. Look at how politics has polarized people today. And suffering can come from the reality of all that anxiety, or the reality of not having enough money, or even running out of money.

When retirement anxiety takes hold, it creates a cycle that prevents clear thinking. The solution? Create a plan that covers as many anticipated situations as you may encounter in retirement.

Early planning builds confidence and gives you options. Instead of worrying about outliving your savings, transform that concern into motivation through practical steps:

• Create detailed pre- and post-retirement worksheets listing everything. This will give you a realistic view of how your cash flow will change.
• Try living on your projected retirement income for several months before actually retiring.
• Consider phasing into retirement or a gradual transition rather than making a sudden change. This may entail going from working full-time to part-time before fully retiring.

Planning creates control because it provides a clear path to achieving your future life. Put simply, proactive planning helps you regain power from uncertainty.

Setting realistic and motivating goals

I use a SMART framework for retirement that helps build a retirement plan. This framework will help build a secure, manageable, accessible, rewarding, and trustworthy retirement plan. It turns vague retirement hopes into achievable objectives. Start by visualizing yourself in retirement and organizing your anticipated expenses into:

1. Needs – These are expenses that are the foundation of everyday life, such as food, shelter, and healthcare.
2. Wants – Discretionary spending for travel, recreation, and consumer goods.
3. Wishes – These are goals related to causes you want to support or family members you’d like to leave a legacy to.

This exercise helps determine how much income you’ll realistically need. For greater motivation, physically write down your goals – this simple act makes them more tangible and real.

I use a professional planning app called MoneyGuide that helps with this process, but there are other DIY apps, such as Simplifi by Quicken and YNAB, that can help you tailor specific goal setting.

The key to reaching realistic retirement goals often lies in your mindset. Retirement planning is more than budgeting and investing. The basis is what will give you contentment and happiness in your life. And you have to be realistic. When I tell this to clients sometimes, I’ll hear, “If I win the lottery, I’d be happy.” Well, yes, so would I, but realistically, within what you have control over, what choices can you make that will bring contentment and happiness to your life?

Getting Your Financial House in Order

Taking inventory of your financial life builds the foundation for retirement security. Without a clear understanding of what you own and owe, even your best retirement planning remains vulnerable to unexpected challenges.

Organizing financial documentation and statements

The path to financial control starts with gathering all your financial documents in one place. Every financial record needs a proper home, from bank statements to retirement account information. Missing an important document could derail your retirement planning efforts.

Create a system using labeled folders in a file box or store records electronically on your computer or in the cloud. For documents with sensitive information like account numbers or Social Security numbers, take extra security precautions—lock your file drawer or encrypt your digital files.

Set a recurring reminder to manage your paperwork regularly. This simple discipline helps you stay on top of your financial situation as retirement approaches.

Here’s a checklist you can model:

✅ Income & Retirement Accounts

• [ ] Social Security statements
• [ ] Pension paperwork
• [ ] 401(k), IRA, and annuity statements
• [ ] Investment account records
• [ ] Required Minimum Distribution (RMD) schedules

✅ Estate Planning & Legal Documents

• [ ] Will and trust documents
• [ ] Power of attorney (financial & healthcare)
• [ ] Advance healthcare directives
• [ ] Beneficiary designation forms
• [ ] Funeral & burial instructions

✅ Insurance Policies

• [ ] Health insurance (Medicare, supplemental plans)
• [ ] Life insurance policies
• [ ] Homeowners/renters insurance
• [ ] Auto insurance
• [ ] Long-term care insurance

✅ Tax & Debt Records

• [ ] Recent tax returns (keep at least 7 years)
• [ ] Property tax records
• [ ] Mortgage documents
• [ ] Loan & credit card statements

✅ Personal Documents

• [ ] Birth certificate & Social Security card
• [ ] Marriage certificate/divorce papers
• [ ] Military discharge papers (if applicable)
• [ ] Homeownership deeds & titles
• [ ] Vehicle titles

If you’re creating a digital filing system, here’s a structure to model:

📂 Main Folder: “Retirement Documents”

• Income & Investments (Social Security, 401(k), IRA statements)
• Estate Planning (Will, trust, power of attorney)
• Insurance Policies (Health, life, long-term care)
• Tax & Debt Records (Returns, mortgage statements)
• Personal & Legal (Birth certificate, home titles, military documents)

Pro Tip:

• Use file names like 2024_Tax_Return.pdf for easy searching.
• Keep a backup in a cloud service and on a secure external drive.
• Consider a password manager to store login credentials for financial accounts securely.

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Creating a financial inventory

Creating a financial inventory takes time, but it will be time well spent. In my 30+ years of advising clients on retirement planning, I have not had one person ever regret getting organized.

Once your documents are organized, the next step is to create a complete inventory of your financial life. List all accounts, assets, and potential income sources you’ll rely on during retirement.

Start by documenting reliable income sources such as Social Security benefits and pension payments. Then compile a full inventory of your retirement assets, including 401(k)s, IRAs, annuities, brokerage accounts, and CDs.

For each account, note important details like account numbers, institution names, and approximate values. This inventory becomes your financial command center—giving you a clear picture of your resources and helping identify any gaps in your retirement strategy.

Understanding your assets, liabilities and net worth

Your net worth calculation serves as perhaps the most important indicator of financial health—it’s what you own minus what you owe. This single figure provides a powerful snapshot of your current financial position.

Plus, if you have debt or obligations, knowing your assets, liabilities, and net worth will help you determine if you need more or less life insurance. And it will help you understand how the ownership of certain assets may affect you and your family’s financial health.

Assets include everything with monetary value: bank accounts, investment accounts, property, vehicles, and personal possessions. Liabilities encompass all debts: mortgages, credit card balances, student loans, and car loans.

You’ll gain clarity about your retirement readiness by calculating your net worth (Assets – Liabilities = Net Worth). Ideally, your net worth should grow over time as you continue earning and saving. Depending on your financial situation and your level of assets, you’ll gain a better understanding of whether the assets need to still be growing, you need to have a system of distribution, or you need a strategy for gifting.

Tax-sensitive accounts and consideration

Understanding how different retirement accounts are taxed significantly impacts your long-term financial success. Retirement accounts fall into distinct tax categories:

Tax-deferred accounts (traditional 401(k)s and IRAs) offer tax deductions now but require paying taxes on withdrawals during retirement. Conversely, Roth accounts provide tax-free withdrawals in retirement, though contributions come from already-taxed income.

If you have tax-sensitive accounts, having a distribution strategy affects you and your family. For example, if you have an IRA with someone other than your spouse as the beneficiary, that beneficiary should understand the tax treatment of inherited IRAs. It’s different and has changed recently.

From an in-retirement standpoint, creating a diverse mix of retirement income sources—a “tax triangle” including taxable, tax-deferred, and tax-free accounts—helps minimize your total tax liability in retirement. This tax diversification strategy provides flexibility and potentially extends the life of your retirement savings. Plus it can offer tax benefits at the time of withdrawal.

Tracking Progress and Adjusting Your Plan

Think of your retirement strategy as a map for your financial journey. Just like sailors adjust their course with changing winds, your retirement plan needs regular assessment and fine-tuning as life changes.

Identifying expectations and concerns

Reality often differs from expectations for many retirees. While most working adults expect a comfortable retirement, only about 2 out of 3 current retirees actually experience this comfort. Many retirees find their spending higher than they planned, with almost half needing more money than they initially expected.

Perhaps most eye-opening, about two-thirds of current retirees stopped working earlier than they planned, with the average actual retirement age (60) happening seven years before the expected age (67). This unexpected early exit from the workforce significantly cuts critical saving years when many would otherwise be at peak earning potential.

Leaving the workforce earlier than expected usually reduces annual retirement income by about a quarter. And that’s a permanent reduction.

Plus, your financial worries will shift throughout retirement. Pre-retirees mainly fear outliving their assets and paying for healthcare, while current retirees focus more on maintaining their quality of life and preventing physical or mental decline. As a result, outliving savings is the most significant concern people have about retirement. But as the COVID pandemic wound down in 2021, its economic effects contributed to inflation becoming one of the biggest threats to retirement security, second only to the risk of outliving savings.

Clarifying your goals, hopes, and dreams

Good retirement planning starts with clear objectives. You’ll need to link your goals to realistic financial plans throughout this process.

Before making major money decisions, honestly ask yourself why you’ve been saving. Beyond financial security, think about priorities like family time or funding important family events.

Staying flexible is crucial as life inevitably changes. Schedule quarterly or yearly reviews with a financial advisor to reassess both your financial and personal goals. These regular check-ins help you adjust your budget based on market performance or unexpected expenses while refining goals as new opportunities arise.

Your retirement planning success depends not just on creating a strategy but on consistently tracking progress and making necessary adjustments as your life circumstances evolve.

Conclusion – Living Your Best Retirement

The path from retirement insecurity to financial confidence remains open regardless of your current age or savings situation. Throughout this guide, we’ve seen how recognizing financial vulnerability is the first crucial step toward building retirement security. Transforming anxiety into action creates the foundation for meaningful progress, especially when combined with realistic goal-setting.

Financial organization forms the cornerstone of retirement readiness. Taking inventory of your assets, liabilities, and net worth clarifies your starting point. This knowledge, paired with understanding the tax implications of different account types, equips you with powerful tools to maximize your retirement savings potential.

Regular assessment is essential as life circumstances change. Scheduling quarterly or annual reviews allows you to refine your strategy based on shifting priorities or market conditions. Remember that retirement planning isn’t a one-time exercise but an ongoing process requiring periodic adjustments.

Most importantly, successful retirement planning balances financial security with personal fulfillment. Your retirement years should reflect your deepest values, whether those center around family connections, pursuing passions, or contributing to causes you care about. Financial security provides the foundation for living authentically during this significant life chapter.

The journey from retirement insecurity to confidence may seem daunting at first. However, breaking the path into manageable steps turns overwhelming anxiety into achievable progress. Start today with just one action – perhaps organizing financial documents or calculating your net worth. Each small step brings you closer to the retirement you deserve – one where financial concerns no longer overshadow your ability to enjoy life fully.

References

Basel, R., Silberman, S., Tavares, J., Cohen, M., & Wylie, M. (2023, February). The continued toll of financial insecurity in retirement (Issue Brief). National Council on Aging; LeadingAge LTSS Center @ UMass Boston. https://assets-us-01.kc-usercontent.com/ffacfe7d-10b6-0083-2632-604077fd4eca/da4e04e3-7d5d-4b8b-ad14-2ae9e45ff39d/2023-Financial_Insecurity_Issue_Brief.pdf

Board of Governors of the Federal Reserve System. (2023). Survey of consumer finances 2022. https://www.federalreserve.gov/econres/scf/dataviz/scf/chart/#series:Retirement_Accounts;demographic:agecl;population:4;units:median;range:1989,2022

Doonan, D., & Kenneally, K. (2024, October 29). Retirement insecurity 2024: Americans’ views of retirement. National Institute on Retirement Security. https://www.nirsonline.org/reports/retirementinsecurity2024/