Anne Graham* says no matter how much planning we do, we’re likely to feel anxious about retirement.
Photo: Rita E
The big day has finally arrived.
You’ve received the oversized “farewell and good luck” card from your colleagues, your clients have wished you well, your team has taken you out for lunch.
But what now?
It’s not as if you haven’t planned for retirement, in fact you’ve spent the past 10 years or so getting all your ducks in line.
Your budget has been your guiding light, every pay rise and bonus has (mostly) been directed to paying down debt or topping up super.
Income has not really been an issue and expenses are under control.
If you’re feeling the prickles of anxiety and uncertainty as the day of financial independence arrives, you’re not alone.
Why then the knot in the pit of your stomach?
Your concern is due to a number of factors, not least of which is the fear of the unknown.
After all, you’ve been receiving a regular income for the past 40 or so years.
In theory, you know that your income will be replaced but there are so many “what ifs” to contend with that your anxiety builds.
Greg and Karen** had been planning their retirement for five years.
We’d met with Greg initially to discuss and develop a comprehensive retirement plan or roadmap, to give some direction as to what the future might look like and to make sure the couple hadn’t missed anything.
You see, although Greg worked with numbers on a daily basis and managed large corporate budgets, when it came to his own personal financial affairs, it was a different story.
He didn’t know what he didn’t know and he worried that he’d missed something and that he’d struggle to turn his dreams into reality.
About six months out from R-day, we revisited the plan, made some tweaks and confirmed the couple’s financial situation was as expected.
Greg was ready to pull the plug and they were both very confident of their future.
Greg and Karen were well and truly on track to meet their retirement dreams.
But anxiety started to creep in.
After all, there would be no more pay cheques coming in and the money they’d worked so hard to save and accumulate had to last them for the next 25–30 years — and that’s daunting.
Would they really have enough to live the comfortable lifestyle they were used to and wanted?
Would their money/wealth last as long as they would?
What would happen if the sharemarket dropped significantly?
Greg and Karen gradually regained their confidence as they adapted to their new routine and financial situation.
They didn’t need to change their spending habits or alter their plans, and they’ve now eased into “living the life” with no financial hiccups.
Others aren’t so confident, despite their financial position and this is often a result of early relationships to money and wealth.
Those born in the Depression era tend to be more frugal, live well within their means and save regardless of their net wealth.
The extremely wealthy sometimes fear their wealth will be lost and are naturally keen to preserve what they have.
This can result in behaviour that seems odd as they may focus on the small, controllable expenses such as energy bills, leading to a reluctance to turn the heating on in winter.
If you’re feeling the prickles of anxiety and uncertainty as the day of financial independence arrives, you’re not alone.
Having a plan and taking more interest in your financial affairs can go a long way to giving you control and confidence.
* Anne Graham is CEO of Story Wealth.
This article first appeared at www.afr.com
* *Not their real names.
