Did you know that 58% of people worry about running out of money in retirement – compared to only 20% who are worried about dying! For April, Stress Awareness Month, financial security expert Pamela Yellen, a two-time New York Times best-selling author, discusses:
People With Savings In Conventional Retirement Plans Are Worried
When it comes to Americans’ top worries, 72% report feeling stressed about money, and nearly 22% say they experience extreme stress about their finances, according to the American Psychological Association. Financial stress is closely linked to health issues including anxiety, depression, insomnia and more, Pamela notes.
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One big reason is inadequate retirement savings. And people who have their retirement savings in 401(k), IRA, and other conventional retirement plans face the constant worry their money will evaporate in the event of another stock market crash.
“Life is stressful enough on its own,” Pamela says in her new book, "Rescue Your Retirement: Five Wealth-Killing Traps of 401(k)s, IRAs and Roth Plans - and How to Avoid Them.” “Do we really need to add the stress of worrying about what might happen to the money we’ve worked so hard to earn?”
Three Steps For a Stress-Free Retirement
- Build a healthy, liquid Rainy Day Fund - "Without a sizeable liquid rainy day fund, you may be forced into selling or liquidating your nest egg assets prematurely - the investments you planned on keeping over the long haul," Pamela says. "When this happens, the timing is often terrible. You're at the mercy of current market conditions and forced to sell at the worst possible time.”
- Make sure a large portion of your retirement savings is in assets that are secure, guaranteed, and liquid. These savings should give you control over your future, rather than being subject to the whims of the government or markets.
- Know the value of your retirement account(s). “While conventional retirement plans such as IRAs and 401(k)s offer no guarantees, there are strategies that allow people to know the minimum guaranteed value of their savings on the day they retire, and at any point along the way.”
“The answer to this question will determine whether you live out your golden years in financial security, or face the constant stress and worry of trying make ends meet,” Pamela says.