Why Is It Normal For You To Worry About Retirement Before You Retire?

The clock is ticking towards your final day on the job. On the other side sits the promise of a proverbial pot of gold at the end of the rainbow.

Or so you have always been told. And you’ve always believed retirement would be just that.

If that’s all true, why are you so anxious?

“Change is inevitably hard for everyone, and the shift from working to not working is huge!” says Wes Moss, Managing Partner and Chief Investment Strategist at Capital Investment Advisors in Atlanta. “For many people, they’ve been working since they were in their teens, and they know how to manage a steady incoming stream of income. We’re talking about decades of consistent habits and lifestyle. From a human and psychological level, the transition will nearly always create anxiety. Will I run out of money once there are no more paychecks? What will my purpose be once my career and steady work income stop? So, it’s completely understandable that the transition will create worry.”

Worry comes in many flavors. It exists for many reasons. As you might imagine, money stands as the taproot of this fear. The funny thing, though, is that money may merely be a symptom, or at the very least a metaphor for the real problem.

Yes, Money, But That’s Only A Start

It’s always hard to talk about money. Because you don’t talk about it, you leave yourself vulnerable to uncertainty surrounding your continued financial viability, especially in retirement. Why is this so?

“Most people are nervous about retirement (and market volatility) because they don’t have a clear financial plan that includes good and bad markets, inflation and what-ifs,” says Jim Pratt-Heaney of Coastal Bridge Advisors in Westport, Connecticut.

Without sufficient planning, it’s extremely hard to have a firm grasp on where you stand in terms of finances. This leaves you susceptible to worst-case scenario thinking. You’re consumed by the thought of running out of money.

“Often, people don’t think they have ‘enough’ money,” says Christopher J, Mackin, Partner and Wealth Advisor at Bleakley Financial Group in Boca Raton, Florida. “It comes from a common scarcity of money mindset where people focus on what is lacking versus how to grow. Shifting this mindset begins with having a plan for your money.”

One of the main reasons you’re concerned about running out of money is you simply don’t know what the future holds. Failing to plan what that future looks like only compounds the problem.

“Perhaps the biggest concern is whether you can afford that new lifestyle,” says Mark Schrader, TIAA Financial Planning Thought Leader located in Charlotte, North Carolina. “TIAA did a Financial Wellness Survey earlier this year, and we found fewer than 30% of Americans feel confident they’re on track with retirement savings to retire when they want, afford the lifestyle they want in retirement or live comfortably throughout retirement without running out of money.”

But there’s something more going on than just worrying about money. First, money involves a lot of things. It may seem like it can solve almost everything, but it may not. Think about those things that affect you most emotionally. Can money buy you true happiness when it comes to those things?

“Initially people seem most worried about whether or not they will have enough saved to have a comfortable retirement, where they can take care of themselves and not place any financial burden on their children,” says Matthew Grishman, Principal at the Gebhardt Group, Inc. in Roseville, California. “Quite often, even when people know they have enough, they still worry about retirement. Recently, I have noticed more people are willing to be vulnerable and discuss this openly.”

And when they start talking, they start asking this question:

What Do I Do Now?

You hear people talk about going from “zero to sixty” as a thrilling sense of accomplishment. Imagine what going from “sixty to zero” connotes. Now you’re beginning to get an idea of what people are so anxious about as they set foot through the door of retirement.

“Many of us started working in our teens with babysitting or paper routes; we’ve built up a lot of momentum towards getting up and going to work,” says Warren Ward, Senior Planner at WWA Planning and Investments in Columbus, Indiana. “If asked to describe ‘who they are’ without being able to state ‘what they do,’ they are at a loss. It’s this transition from being busy all the time at something they are known to be good at to having nothing required of them that is at the heart of the anxiety.”

But, again, there’s more to this condition than meets the eye. It’s not just that a void exists where substance once filled it. There was also an inherent structure to that substance. And, unless you were a solo entrepreneur, there was no isolation within that substance.

Retirement is different. No one is there to look over your shoulder, tell you what to do, and measure your progress. In short, in retirement, you are an entrepreneur. You set your schedule, you define your goals, and you determine if you’ve met those goals.

Alas,…

Some People Can’t Be Their Own Boss

If you’ve spent an entire career being told what to do, chances are you like being told what to do. It’s natural, then, to view retirement with some trepidation. For the first time in your life, you will become the master of your own domain. Are you ready for your close-up?

“Some people are worried about retirement before they retire because they do not know how they will spend their retirement,” says Annette Harris, the Founder of Harris Financial Coaching in Jacksonville, Florida. “They are used to working for people requiring their expertise in their area of work. In retirement, you are in charge of your life and have to plan your days, weeks and years on your schedule and not at the beck and call of others. Some people find this scary and think that their usefulness to others diminishes.”

All your life, you’ve come to view yourself by what the nameplate on your desk says you are. Well, you can put that nameplate in your box of personal items, take it home with you and place it on your fireplace mantel, but it’s not the same thing.

“Most people just don’t know what to expect and are scared that they won’t know how to fill their time,” says Taylor Kovar, CEO of Kovar Wealth Management and The Money Couple in Lufkin, Texas. “They lose their title and responsibilities once they retire and that is why many people push off retirement for years and years.”

Can you remember what it was like on your first day of school? Sure, you knew what it was like boarding that bus, but did you really know what was beyond the bus? Retirement can be like that.

It’s A Whole New World

In this unexplored environment, all the usual worries take on new meaning. They can be amplified. They can be distorted. They can mutate into a wholly different animal.

“Retirement is a major shift for a lot of people, they go from having a steady routine and paycheck to having to find things to preoccupy their days with and making sure they’re not living beyond their means,” says Jason Priebe, Partner and Wealth Advisor at Priebe Wealth in Maple Grove, Minnesota. “Some people worry about their portfolios; do they have enough money? What if the market sees a downturn for a period of time? Others worry more about lifestyle aspects such as what they’ll do, will they be bored, how will they continue to socialize, etc.”

Even on an alien planet, an astronaut can survive if provided with a mission manual. There are simply too many unknown unknowns to reasonably expect you can anticipate all possible scenarios. While having a plan is no guarantee you won’t have surprises, it does often provide a template for dealing with them.

“People fear retirement because of all the unknown variables,” says Stephen Dunbar, Equitable Advisor at Equitable in Atlanta. “These can include: where will they live, who will they be responsible for supporting, how much is needed to cover their basic expenses and extraordinary expenses through death, how much will medical care cost, what will they do on a weekly basis with their new lifestyle and how much will this cost them? Typically, people do not spend sufficient time thinking through these details and building a written plan that covers as many of the known variables as possible. People spend more time planning a 2-week vacation than they do on their retirement plan.”

There remains one final specter looming over us all. Retirement begins the final chapter of your life. For many in your shoes, it causes them to pause and reflect. It’s not one of those “was it worth it?” or “if I could do it all over again” types of questions. It’s much deeper than that.

What’s The Meaning Of My Life?

During your working years, you may have been trapped into thinking you knew the answer to this question. But that answer really only applied to 40 hours in a week filled with 168 hours. Did you ever stop to think about those 128 other hours?

“There’s a lot of personal, professional, and financial uncertainty that goes along with retirement,” says Michael Crook, Chief Investment Officer at Mill Creek Capital Advisors in Conshohocken, Pennsylvania. “Work makes up a large portion of many people’s lives and can be the primary source of their self-worth and social connections.”

And if you have let those 40 hours govern the other 128 hours, what happens when the 40 hours are stripped away from your identity?

“Many people are afraid of becoming irrelevant, unsure of their purpose in life and how they will spend their time once they do retire,” says Grishman. “Having all the financial security in the world as you approach your retirement may not be enough to feel confident and ready for retirement. My father is a wonderful example of this. He is 77 years old and still working full-time as a school administrator. Between his pension and retirement savings, he has more than enough to take care of himself. What he has lacked up to this point is a clear direction for ‘what’s next.’ My father is a doer who is very passionate about having an impact on people. What keeps him working thus far is knowing he is having an impact in his current role, and he is unclear on how he could continue to have an impact if he were to retire.”

You are more than a blank nameplate on a desk. Look forward to a retirement where you can enjoy who you are and begin to fill that nameplate with your legacy.