Whether you’re worried about saving enough money for the future or regret that you didn’t set aside enough in the past, it’s easy to get stressed about retirement. Anxiety levels can escalate even further at the thought of trimming costs to save for retirement. “The overwhelming advice about cutting your expenses and saving for retirement makes it sound downright unappealing,” says Asghar A. Kazim, principal and co-founder of United Wealth Group in Princeton, New Jersey.
Yet budgeting funds for the future doesn’t have to be a stressful task. “Saving for retirement should be tolerable and maybe even enjoyable,” Kazim says. “You are putting money aside to secure the type of retirement you’ve earned.” To clear up financial worries about retirement, you’ll want to start saving slowly, build over time and keep at it. Here are some ways to overcome anxiety and take a steady approach to prepare for the years ahead.
Track your cash. If your checking account balance is very low at the end of each month, it can be stressful to try to find money to save for retirement. Instead of worrying about your draining account, try evaluating how you spend your dollars. You may find you can free up cash painlessly. “Set aside a day each month to closely review your recurring monthly payments on your credit cards,” Kazim says. You might spot subscriptions and memberships that could be canceled. For instance, if you’re streaming more shows and watching less premium cable, it might be time to stop your cable subscription. That amount could instead be allocated to a retirement account.
Don’t worry about the past. If finances were tight during the last decade and you didn’t set much aside for retirement, you may be anxious about lost years. Rather than dwelling on the past, focus on what you can do going forward. “No matter your age, if you haven’t started saving for retirement, get started,” says Katie Ross, education and development manager for American Consumer Credit Counseling, a nonprofit organization. “Even small weekly contributions will make a difference to your bottom line once it’s time to retire.”
Check with your employer. Many companies allow employees to contribute regularly to a retirement savings account and even deduct funds right from your paycheck to put toward retirement. This setup can eliminate tension, as it streamlines the savings process. “See if your job offers an employer match, meaning your employer will match your retirement contributions up to a certain percentage,” Ross says. If a match is available, try to put in the maximum amount that will be matched.
If you already contribute to a 401(k) but are worried you might be taking on too much risk, take some time to review the plan. “Depending on your age and how long until you plan to retire, your investment personality may have changed,” Ross says. If you only have several years before retirement, you might want to put contributions in a lower-risk fund to stay safe if the market dips. If you plan to work for a couple of decades, you may opt for a higher risk option, as the market will likely have time to rebound from any losses before you retire.
Share your worries. If you haven’t talked to your significant other or a trusted friend about retirement, you could be missing out on a chance to alleviate your concerns. “It’s easy to underestimate the power of having an honest conversation about your financial future,” says Stuart Robertson, president of Capital One Advisors 401(k) Services. “Start by discussing your current financial situation. Talk through your game plan to tackle credit card debt, build up your emergency fund and figure out what your wants and needs are for both the long and short term.” After speaking about it, you’ll be able to think through the next steps. You might decide to set up a retirement account or increase how much you are saving each month.
Focus on progress. Feeling pressure to put aside a large amount each month can lead to an urge to give up or not contribute anything toward retirement. “Compound interest is a great thing, but you can’t compound zero,” says Mike Molitoris, managing director of Flagship Wealth Management Group in Cary, North Carolina. Putting aside even $50 a month can serve a purpose and move you in the right direction. “You’re training yourself and building in discipline to save,” Molitoris says. After a few months, you might find you can increase the amount to $75 a month.
Consider a target-date fund. If managing all the risk decisions for a 401(k) keeps you up at night, look into a target-date fund. “Target-date funds offer a long-term investment strategy based on holding a mix of stocks, bonds and other investments that automatically changes over time as the participant ages,” says Kevin A. Griffin, a certified financial planner for Griffin Financial Planning in Cohasset, Massachusetts. You can choose a single fund based on your “target,” or estimated retirement date.
Make it automatic. In addition to having funds deducted from your paycheck to go into a 401(k) plan, you can opt for regular withdrawals to be placed in other retirement accounts. “Most investment companies will allow you to link to your bank account and make systematic purchases however often you want,” Molitoris says. You might decide to have $50 taken from your account each month, or $100 twice a month. After setting it up, you won’t have to worry about remembering to save each month.
Set a goal. It can be unsettling to think you might be short on funds when you retire. To make a confident plan, look at how much money you currently have saved, and then picture what you want your retirement to look like. “What is your vision of what you want to do in retirement?” Kazim says. “Your vision should bring about positive thoughts.” Write down your vision, put it in a spot where you can easily see it and share it with an advisor. Together you can make a checklist to keep track of the accomplishments and milestones you’ll complete to make the vision a reality. “This takes away some stress since you are actively building a plan and setting goals in motion,” Kazim says.