4 Ways to Reduce Your Retirement Anxiety

Retirement is a subject that gets increasingly scarier as you age. There are just too many variables to accurately predict how much money is necessary. So, unless you are extremely wealthy, there's bound to be some anxiety about whether you will have enough to live comfortably. Here's how to eliminate some of your biggest retirement fears.

[See The 10 Best Places to Retire in 2012.]

Work on your health. Your health care expenses could increase exponentially in retirement. Many healthy workers almost never have to go see a doctor. But doctor visits, tests, and medications will become more frequent as you get older. Take steps to reduce your health care costs by staying active and eating a healthy diet. Exercising will help your energy level immediately, which could lead to other positive outcomes such as being more productive.

Pay off your house. Paying of your mortgage completely eliminates one of your biggest monthly costs. Although interest rates are currently extremely low, planning to make mortgage payments throughout retirement puts unnecessary stress on your finances. The easiest way to feel more secure in retirement is to reduce your fixed expenses as much as possible. This includes aiming to be debt free by the time you retire, and possibly downsizing so you aren't paying for unnecessary upkeep on a huge house. You might even find that you enjoy the simplicity that comes from a small house with no housing payments.

[See How to Finance Life Until 100.]

Stabilize your family obligations. Do you have parents that you will likely need to take care of when you retire? How about children who are still depending on you? Don't kick the can down the road anymore. Spend some time together to come up with a plan so all family members know what to expect when you retire. Figuring out what monetary or personal support you plan to provide to relatives will remove unnecessary strain and anxiety from your relationships and allow you to budget for the costs.

Develop your lifelong hobbies early. Many people jump from one interest to the next, and that can get very expensive. Many hobbies require an upfront capital investment that you may never get back. When you are retired, you may be tempted to try a lot of different hobbies, only to put your new equipment in the garage after three months. That's why it's a good idea to develop hobbies early, when you have less money in your bank account. When you are young and relatively poor (compared with your retired self), you also likely have more motivation and energy to figure out how to make the hobby work on a budget. Begin to pursue potential retirement activities before retirement, and figure out how to go about it in a frugal way.

[See How Long Should I Work Before Retirement?]

Retirement could be decades away, and there are many variables that are in flux. By reducing the expenses you know you will have, you will be much closer to guaranteeing a solid and comfortable retirement.

David Ning runs MoneyNing, a personal finance site aimed at helping others change their habits for a better financial future. He suggests that everyone to sign up for an online savings account to get more out of our hard earned money.



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