Get Over Your Fear of Retirement

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If the idea of retirement both excites you and fills you with dread, you're not alone. A recent Gallup poll showed that only 43% of working adults expect to be able to afford a comfortable retirement. However, when Gallup asked actual retirees how they're doing, 79% said they have enough money saved to live comfortably. In other words, for some, there's a fairly large gap between their fears and reality.

One of the best ways to conquer fear of any kind is to face it head on. Here's how.

Estimate your finances

Unless you've kept careful track of your personal finances, retirement-related anxiety may be due to not knowing how much more you need to save and invest. You can get an idea by taking the following steps.

Create an estimated retirement budget

Start by looking at your current household budget to determine which bills will stick with you and which you'll get rid of before you retire. For example, if you're carrying a mortgage into retirement, include that, along with everyday expenses such as utilities and groceries. If you're currently paying any bills that will be paid off by the time you retire, cut those from the budget.

Add together all expected income sources

This includes personal savings, retirement accounts, pensions, Social Security, annuities, rental properties, and other funds you expect to receive. If you're due Social Security but are unsure how much to budget, create an account at My Social Security .

My Social Security gives you access to all kinds of information, including your Social Security payments at different ages. Once you've totaled expected income, compare it to the estimated post-retirement budget.

What now?

You should now have a better idea of your situation. Let's say you expect to bring in $3,000 monthly (after taxes), but estimate your retirement budget to be closer to $4,000 per month. Job one is to come up with ways to fill that $1,000 gap. That may mean putting more into a retirement account, cutting retirement costs by paying off debt , creating a new income stream, or some combination of the three.

Knowing where you stand financially may not relieve your retirement fear, but it does give you something concrete to focus on and work toward.

Decide if you'd like to work in some capacity

According to CBS News, approximately 1 in 5 people over 65 continue to hold down jobs. For many, remaining in the workforce is the only way to make ends meet. For others, working is about staying sharp, being socially engaged, and maintaining a routine. It's about what works best for you.

If retirement is just around the corner and it doesn't look like you're going to be ready, consider whether a part-time job would fill the gap. If you have no interest in working beyond retirement, now's the time to focus on plumping your retirement fund. Here are a few ideas to get you started:

• Cut unnecessary expenses from your current budget and save the money. This includes subscription services, dining out, and spending money on high-interest loans and credit cards.
• Decide where you'll live once you retire. If you're in an area with a high cost of living, consider other parts of the country (or world) that are less expensive.
• If you're healthy enough, consider a side hustle and add those earnings to your retirement bucket. A side hustle can be something you enjoy, like tutoring or pet sitting.

Embrace market uncertainty

If most of what you've saved sits in investments, you may worry about how your nest egg will survive a bear market. Here's the truth: The stock market will rise, and it will fall. It has always been so. Ups and downs may be perfectly natural, but they also scare the socks off people.

Like the ebb and flow of the tides, stock market ups and downs are natural. You can plan for bear markets by having enough money in a cash account to draw from when one occurs. That way, the money you've invested can be used to snap up stock at a bargain price and grow in value with the next bull market.

Finally, you may not be able to avoid risks, but you can minimize them by diversifying your portfolio. Let's say you're bullish on tech stocks. Feel free to invest, but don't put all your eggs in the tech basket. You can afford one sector to drop as long as your portfolio is balanced.

The point is this: If the idea of retirement finances causes you to break out in hives, do what you can to take control in the time you have left between today and retirement. The more you focus on moving in the right direction, the less time you'll have to worry about what could go wrong.

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