Podcast Episode 251: The Pain Points in Retirement

Today’s Wisdom:

Everyone has something in finance that bothers them. It’s different from person to person but we all have to face these pain points and address them in retirement planning. Today we’ll identify the most common problem areas and what we do to help clients ease these worries.

What You’ll Learn:

Money brings out a variety of emotions in people and we all deal with our own individual pain points when it comes to retirement. We all worry about some things more than others but just about everyone has at least one financial area that they struggle with.

In this episode of Money Wisdom, Eric Hogarth, CFP®, takes us through the most common pain points that we help clients with and what you can do if you have similar feelings.

You can’t talk about retirement worries without first starting with the fear of running out of money. This is one that many people lose sleep over when they don’t have a plan. What’s interesting is that the people who are best prepared for retirement are the ones most worried about running out of money. It’s because they’ve spent their lives saving money and now they have to start spending. That’s not comfortable for them but building a plan will ease those worries because you know exactly what you need to do in retirement.

In order to keep as much money as you can, you next have to address taxes, which is another pain point. The chances that you’ll be able to eliminate taxes if you have any income, is next to zero. What you want to focus on is making sure you aren’t paying more in taxes than you have to. It’s not just about what you’ve saved in retirement but it’s also about where are you going to pull that money from that you intend to spend in retirement. You have to be smart about spending that money you’ve been saving for so long and you shouldn’t put that income plan together without looking at taxes.

Thinking about life in a nursing home creates a lot of fear in people as well. Not only what it will look like and how that experience will be, but also how you will fund that large expense. This long-term care conversation has to come up with your advisor while you have options because it costs a lot of money. If you wait too long, it will be way too costly for you.

Another pain point that we see from clients is the uneasiness of walking away from a paycheck. Having that guaranteed income is such a safety net. We might not ever be able to take away that feeling but we can help you understand your options for retirement, and one of those might include working in some capacity to keep that paycheck if that’s what gives you peace of mind. Either way, we want you to feel confident in your income plan so that you know you can step away from the paycheck if that’s what you want to do.

The final pain point we cover in this episode is the anxiety around when the next market crash will happen.  Don’t try to time the market because you can’t. The likelihood of missing a bad day is just as good as missing a good day. The best way to earn money in the market is to leverage compounding by staying invested and doing so in a way that matches your risk profile

As always, we encourage you to take advantage of our Money Map review process to address worries like these and help get your financial future on the right track.

0:27 – Back from a Disney vacation  

1:58 – Worry about running out of money

4:40 – Angst around taxes

6:10 – Fear of ending up in a nursing home

7:52 – Uneasiness about walking away from a paycheck  

9:17 – Anxiety over an impending market crash

11:23 – Addressing these pain points