Retirement dreams, retirement planning, and retirement saving are all related, but this mental crossroads is challenging and often compartmentalized. You may love to dream about being retired, but the planning and saving parts cause anxiety. You may be highly focused on the saving and investing, but have no idea what you’ll do once retired, and the very idea of stopping seems stressful. Or like many, your head space may be somewhere in the middle.
Saving and investing cause a great deal of anxiety and stress for many, and it’s ironic, not the funny kind, that this sits next to your retirement dreams. You may dream of some big-ticket item, a boat, a second home, an RV, and that dream gets you out of bed and into work each day. Maybe experiences are your thing: travel, learning, or the arts. For some it may not be a dream at all, it may be working to fight fears, fears of not having enough, fears of “running out of money,” fears of aging. For many the reality lies somewhere in the middle of these spaces.
And we’re continually intersecting it with savings and investing. For some this is a continuous mental calculation that’s usually not rooted in fact. The stock market slumps, and there goes the trip to Tokyo. The stock market is screaming, and all of a sudden, we decide to pile on some new dreams wondering if investments will fall victim to a trade war, a real war, or a war with the spouse. We suddenly have to back off on the 401(k) to fund college, and with one simple change, all of the dreams are pulled into question by our crazy mental math, creating stress.
This is often our mental reality. It seems manic because it is. We carry almost all of the weight when it comes to creating our financial post-work life.
So, we probably need some help with this, and that help can come in a variety of forms. Let’s not stir up any additional anxiety about the types, structures, and packaging that financial advice can take. Let’s assume you go to a reputable investment advisor or planner. Someone who is good will be using sophisticated software that is very helpful, and very complex, bringing everything to the table.
Your advisor and the software will do what they are told (if you don’t feel that’s the case, run!). But now you have to begin quantifying all of these dreams, wants, and fears. You have to put numbers on the intangible. Some advisors use software that is goal based and others use software that is cash flow based. So, planning for the RV, or the trip, versus, just planning to replace a certain amount of your current income in retirement. This is not a software judgement, most of this software can do a little bit of both just fine.
You are part of the input for all of this, and so you answer the advisor’s questions, the advisor gives you the plan, and now all of that stuff seems more concrete. Now you worry about the plan and what’s in the plan, or did you leave something you might want out because the computer said you’ll run out of money? If it seems like we have come full circle it’s because we have.
The retirement picture is something that evolves over time. You can and should dream, and allow yourself to have options knowing that circumstances can change, and your wants and needs will change. Your retirement dreams at 35 are probably very different than your retirement dreams at 45 or 55. You will have spent decades working hard, and when you actually stop, you may find a different mindset yet again. After a year or so in retirement with some time to breath and reflect, you may have a new view about what you want and what’s important.
All of the basic habits of planning for a successful retirement are very similar, and your probably already doing those things. When we intersect dreams, and numbers, and investments it can bring up a lot of stress that we create in our mind. Cut yourself some slack, and be patient with yourself. It’s a long and changing game with very few things set in stone.
A good financial advisor will work with you to update and refresh your plan every year.
At Buoyant Financial we enjoy working with people and understand that these feelings can be complex, stressful, and changing. We have the fancy software, but we also have the mindfulness and patience to work with you as a human with hopes, dreams, and fears.