Retirement planning anxiety is real. Here’s how practical advice can help

Retirement anxiety is real. In fact, FTAdviser found that 1 in 8 people would choose a trip to the dentist over retirement planning, and 1 in 4 would prefer to deep-clean their bathroom.

It’s normal to be nervous about retirement planning; you might feel intense pressure to make the perfect plan, or worry that, despite your best efforts, you won’t be able to afford the lifestyle you want.

However, if you let your anxiety turn into avoidance, pausing your retirement plans indefinitely could make it even more difficult for you to realise your dream retirement.

Keep reading to learn whether you’ve been subconsciously avoiding retirement planning, and three strategies you can use to help overcome your anxiety.

4 in 10 people find retirement planning “too stressful” – and you might too, without realising it

44% of the individuals surveyed in the same FTAdviser report put off thinking about their retirement provision because it was too stressful.

Even if you don’t consider retirement planning a stressful experience, you could still be unknowingly avoiding it. 66% of respondents said they would prefer to perform other uncomfortable or unpleasant tasks instead of sitting down and sorting their pension (like the aforementioned trip to the dentist).

So, if you’ve yet to think about retirement in detail, despite wanting to retire soon, ask yourself: “What is the real reason I haven’t made a retirement plan yet?”

Answering this question can help you reveal previously hidden barriers you might not even have known existed, like:

• A demanding career that soaks up all of your time and energy
• Thinking that you are too young to start retirement planning
• A disconnection from your future self, leading you to prioritise your present needs over your future goals.

While these roadblocks are understandably difficult to get past, once you get closer to the milestone of retirement, you will realise that the longer you have had a plan in place, the more secure your retirement is likely to be.

Breaking down these barriers sooner rather than later can give you more time to plan, allowing you to take advantage of tax-efficient wealth opportunities and retire on your own terms.

3 ways you can overcome retirement planning anxiety

Acknowledging that you are anxious about, or avoiding, retirement planning is the first step to overcoming your doubts.

Next, there are several steps you can take that break down the process into digestible parts.

1. Set clear retirement objectives

Like a journey without a destination, it can be difficult to create a retirement plan without a set of goals to work towards.

First, decide on your ideal retirement age to help you establish a time frame for your plan. Keep in mind that the earliest age you can access most private pensions is 55 (57 from April 2028), but some people can still retire earlier, drawing on ISAs and other savings in their early retirement years.

Next, consider how you want to spend your time in retirement, whether that’s travelling, giving back to causes you care about, spending time with loved ones, or learning new skills (or perhaps a combination of the above).

They say that “how you spend your days is how you spend your life”, so taking a moment to think about how you will spend your time in retirement means you can accurately calculate the necessary income you need to support these ambitions.

In line with your objectives, you can then review your current financial circumstances to develop a savings and investing plan that can help you realise these goals (more on this in the next step).

2. Structure your expected retirement income via cashflow modelling

Cashflow modelling can help you gain data-driven expectations for your retirement income.

Rather than relying on pen-and-paper calculations or vague assumptions, cashflow modelling provides a comprehensive analysis of your current financial context to present more accurate predictions of your future financial security.

Financial planners use cashflow modelling to project your income from various assets, including your private pension (and State Pension, when payable), investment portfolio, properties, and savings, as well as how different circumstances could impact these income streams.

The more regular these forecasts are – for example, aligning with your annual financial review – the more reassurance you can receive knowing that your finances are on track.

If you’re anxious about possible economic events affecting your wealth, such as a stock market dip, cashflow modelling can be useful to predict its hypothetical impact on your wealth.

Likewise, you can adjust your personal circumstances within the model to see what effect they would have, such as a divorce, a family member passing away, or you continuing to work for a few years longer than you had planned.

With these predictions in mind, you could work to fill any potential gaps in your retirement income before they appear. If there are no gaps to fill, a clear visual representation of your wealth circumstances could give you the confidence to retire with peace of mind.

3. Speak with your Kellands financial planner to build a flexible plan that accounts for various what-if scenarios

When you stop working and your income becomes finite, it’s easy to overthink what-if scenarios that could affect your money, such as:

• What if the stock market dips just before I take my pension lump sum?
• What if my home needs expensive repairs?
• What if the cost of living rises beyond my means?
• What if my partner or I require long-term care?

If these issues are causing you significant anxiety, you can work with a financial planner to account for them within your retirement plan to help you relieve this stress.

For example, your Kellands financial planner can help you build an emergency fund to cover unexpected short-term costs or periods of market fluctuation.

Likewise, we can help you calculate and factor in the costs of care and other possible future health risks into your retirement savings and investing plan to ensure that unexpected events, such as an accident or illness, don’t derail your retirement.

To find out how our award-winning financial planning team at Kellands can help you find your retirement planning confidence, email us at hale@kelland.co.uk or call 0161 929 8838 today.

Please note

This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.

The Financial Conduct Authority does not regulate cashflow planning.

A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance.

The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.

The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested.

Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.

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