Five Common Retirement Fears and How to Overcome Them

A man looking fearful looks over the top of a cubicle wall in an office.

(Image credit: Getty Images)

published 11 February 2024

If we’re to believe everything we see in magazine and TV ads, retirement is a time of leisurely bike rides with your spouse, lunching with friends and exploring hobbies like painting or ceramics, all done in joyful contemplation. But the realists among us might rightly have their doubts — suspecting that behind these idyllic images, there could be boredom, financial worry or even depression.

My experience with clients nearing retirement confirms such suspicions. While many are eager to leave the 9-to-5 behind, they’re uncertain about what comes next. For better or worse, work gives shape to our lives, prompting us to wake up each morning, make ourselves presentable and get along with people. It’s also a source of income and, for many, a means of accessing health insurance. Once that structure vanishes, the responsibility falls on you to re-create it for yourself.

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For retirement to be successful, it's important to know how you'll spend your time — and it can't be something vague, like "relaxing" or "golf." You need more concrete retirement plans that have you interacting with other people and make you feel valuable. Think along the lines of: "I plan to volunteer 10 hours a week with my local soup kitchen, take a conversational French class, play pickleball three times a week and meet up with friends for coffee twice a week." These are specific plans that keep your mind and body active and create community.

Address this fear head on with planning. A financial adviser can help you create portfolio strategies to shore up your savings, such as diversifying your investments to reduce market risk or including fixed income annuities to create a guaranteed stream of income and act as a safety net against market volatility. They can also help you create a well-crafted retirement budget so you know what you can and cannot afford.

First, educate yourself about Medicare, so you can learn some of the basics about how it works and what it costs. In general, Medicare Part A provides coverage for inpatient hospital care. To get coverage for doctor’s visits and outpatient care, you need Medicare Part B. You can also buy supplemental plans called Medigap coverage. For prescription drug coverage, you’ll also need a Medicare Part D plan.

The shift from accumulating savings to generating a steady income source can be intimidating for many retirees. Pay careful attention to timing. A bear market in the first few years of your retirement impacts how long your money will last because of a financial concept known as sequence of returns. Poor investment returns early in retirement, when you first begin making withdrawals, can deplete your portfolio faster than if you are taking money when your balance is up. A bear market later in retirement, after your portfolio has had time to grow, won’t have as much impact.

The key is open communication about how this will go. It doesn’t have to be adversarial or confrontational. Explain to your spouse that you’re nervous about how retirement will impact your relationship because spending so much time together will be new. You might have a list of some activities you’ll want to do together, but it’s also important to have space to foster your own interests and friendships.

Securities offered through Cetera Advisor Networks LLC, Member FINRA/SIPC. Investment advisory services offered through CWM, LLC, an SEC Registered Investment Advisor. Cetera Advisor Networks LLC is under separate ownership from any other named entity. Carson Partners, a division of CWM, LLC, is a nationwide partnership of advisors, address 14600 Branch St. Omaha, NE 68154. Erin is a non-registered associate of Cetera Advisor Networks LLC.     

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Erin Wood is the Senior Vice President of Financial Planning at Carson Group, where she develops strategies to help families achieve their financial goals. She holds Certified Financial Planner, Chartered Retirement Planning Counselor and Certified Financial Behavior Specialist designations.