Five Ideas on Dealing with Fear of Retirement

Perhaps one of the most difficult emotions to face when you are on the edge of retirement is fear.  With an early retirement you are literally changing how you live on a very fundamental level (ie: living off your assets instead of generating more).  So all sorts of questions come up: will my investments earn enough, what if inflation is higher, will my spending be higher than I predicted? Will I run out of money or just be bored?

At some point you have to face those fears and make up your own mind if you are ready.  Five suggestions on dealing with fear are:

  1. Get a second (or third) opinion.  Seek friends or family who are retired and professional input on your situation.  They may all be wrong, but shopping around for ideas is not a bad idea.  You might come across something that helps you decide you covered your bases or something you forgot.
  2. Do some scenario planning.  Imagine various problems and try to come up with some creative solutions for them.  Could you do some part time work if required?  Could you sell your house and pay rent if you needed?  Do you have some excess spending in your budget you can live without in a few lean years? Could you spend some more time with your investments and increase their return? Don’t focus on the problems, find the solutions.
  3. Remind yourself why you are doing this.  Does an extra 10, 15, 20 years of complete freedom worth some risk?  Write up a list of pros and cons, but make sure to put FREEDOM in big letters at the top of the pro column.
  4. Plan some activities.  Worry tends to come about when you have too much time on your hands, so plan to be busy.  That way you can keep yourself busy while your subconscious keeps working on the problem and perhaps finds a solution.
  5. Acceptance.  If you are lucky some of the above will get you to this point.  You realize I can’t know everything or even plan for it all.  Life is full of surprises some good and some bad.  So get busy living already and break out of the shadow of fear.  Do you really think your last thought on this earth is going to be: I wish I worked longer?

 This post is now part of the 140th Carnival of Personal Finance.

7 thoughts on “Five Ideas on Dealing with Fear of Retirement”

  1. It seems to me that most people have a fear of retirement for several reasons: 1) Lack of money or the money will run out; 2) Getting bored or having nothing to do. These seem to be the reasons I hear from those who are knocking on retirements door.

    Several things one can do – spent time in retirmeent helping others – volunteer your time to keep busy.

    Find activities that will occupy you, this will keep you from getting bored and wanting to spend money to pass the time.

    Last, brainstorm of frugal ways to travel. Most retired people want to travel and this gets expensive – so brainstorm on ideas of how you can save money, etc.

  2. “So get busy living already and break out of the shadow of fear. Do you really think your last thought on this earth is going to be: I wish I worked longer?”

    Excellent point. I often tell my twenty-something friends when they are pondering a large consumer purchase: Do you think you’ll have any fond memories of this TV (PS3, camera, etc etc) twenty years from now? The answer is no. Spend it on experiences instead. You’ll always remember the first time you went whitewater rafting or bungee jumping or skydiving. Or that once in a lifetime trip.

  3. Having gone through the fear…I found it helpful to ask other people who were already retired…Would you do anything different? The common answer was yes…I would have retired 5 years earlier.

    In Canada…the CPP and OAS increases retirement income significantly so if your alright before that…its all gravy.

  4. At 57 I suddenly found myself retired when my company was sold and the new guys decided I was too old and too highly paid and I wasn’t willing to get in the trenches again.

    My biggest problem was shifting from an “earning and saving” mentality to one where I could accept using the earnings from investments to live. I had always reinvested my investment income and now I had to spend some of it to live.

  5. Making the switch from earning to spending your savings would be the toughest one I think. You are essentially saying, “this is it, this is the last phase of my life” . It may be subconscious even.

    It’s certainly not a bad thing, it’s the time when you get to do all the stuff you never got around to doing earlier. And have money for it too (hopefully).

  6. CM,

    I heard similar stories from people. They wish they did it earlier. So perhaps my goal of 45 is a good one, I’m leaving five years earlier than 50. *grin*


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