Don’t Underestimate the Importance of Your Mindset Toward Your Finances

The concept of retirement planning is simple. Despite changes in the economy or lifestyles, the notion of planning your retirement has remained unchanged. We work, save, and retire, trusting we have been good stewards of our money. But while the concept may be the same, the pieces that create a successful retirement have evolved. Individuals and families currently saving for retirement are facing challenges that were previously not considered. Without pensions and hefty Social Security checks, it is increasingly more important to maintain a healthy attitude of proactivity.

Create a Habit out of Saving

In today’s world, more U.S. companies are phasing out defined benefit pensions and are instead replacing them with 401(k)s or Roth IRAs.^[1] Unfortunately, these contribution plans are subject to market ups and downs, which means you could face some risk while you save.^[2] This, however, does not mean a secure retirement cannot be achieved. With diligence and consistency, you will be able to enjoy peace of mind knowing your retirement future will be stable.

The earlier you begin to save, the longer you will have to accumulate wealth, and recover from the ebbs and flows of the market fluctuations. Be aware your spending habits, and ability to save may vary significantly throughout life, creating an ever-changing need for updating your strategy.^[3] This is why it is vital that you be focused on your long-term goals. It is prudent to annually review your current savings, budget, and investments with a professional, to stay the course, or even improve your current plan. By dedicating some time, and a portion of your paycheck to your retirement goal, you can easily eliminate your fears of the unknown. During this “accumulation” phase, being proactive and having the proper retirement mindset could be the difference between the anxiety of unpredictability, and experiencing the joys of freedom in creating new, exciting memories during your golden years.^[4]

Steady Your Transition-Period Mentality

Shifting from saving to spending requires a mindset change and could create anxiety of dwindling funds. The number one question asked of advisors from retirees is “do I have enough to sustain me though my lifetime?” After years of investing, applying your earnings can create apprehension, but this could be avoided with some professional advice on creating retirement income, and budget planning.

By retirement age, it’s likely you have created a habit of allocating bills and expenses from your paycheck. You have budgeted according to what you are earning, including a portion invested in retirement savings. Hopefully, you have paid off major expenses like home loans, and now need to adjust your budget to a new normal. It is important to remember how hard you have worked for this time, and with a little planning, you will soon be enjoying a smooth transition into retirement. As you settle into this new phase of life, lean into the “stay the course” mentality. Regular check-ups could hold the key to making your savings last a lifetime.

Ultimately, retirement planning exists so that we can spend more of our time living instead of worrying. If you want to start mapping out your retirement plan, or feel it’s time for a check-up, call us for a complimentary review of your finances! There will never be a better time than now to begin your journey.