Retirement is popularly referred to as the golden years of your life. This is primarily so because life in retirement is considered to be free of stress, as the pressures of work no longer bother you. Moreover, your children are older and settled in their lives, and you have little to worry on that front too. However, there still remains no guarantee of a stress-free life in retirement as matters such as, ill health, inadequate funds, and poor estate planning can be a cause of concern for some retirees. But with proper planning and careful execution, you can ensure that you enjoy your retirement without any unnecessary hassles or financial anxiety. Here are 7 ways in which you can relieve stress and be mentally healthy during retirement.
Retirement and deteriorating health may go hand in hand for some people. As you age, your medical issues may increase and may give rise to money problems. With the increase in the costs of healthcare, it is crucial for you to plan for your health expenses before you retire. This can be done in several ways, the first of which is through insurance. A comprehensive health insurance plan can ensure that you are financially covered against critical ailments, accidents, and long-term care needs. As a result, you will not have to use your money saved on unexpected medical treatments. Apart from a health insurance plan, you can also save in accounts like the Health Savings Account (HSA) that can be used for qualified medical expenses. This allows you to save systematically and build a corpus that can be of help in retirement. Having a sound financial strategy for medical expenses will allow you to focus on your health alone and not have to worry about hospital bills at a trying time.
An emergency fund is as important in retirement as it is when you are working. Although the risk of losing your job and income are low in retirement, the need for money can arise anytime and for a number of reasons. A medical emergency, natural calamity, global pandemic, etc. can adversely affect your financial plans and liquidity concerns. Therefore, an emergency fund can help you stay afloat in such times. When you save for an emergency in retirement, you can follow the same principle of keeping aside 6 to 8 months of your monthly expenses. However, apart from taking into consideration essentials like groceries, electricity, etc. you must also add unexpected costs like medical expenses, etc.
The chances of your children needing monetary assistance from you in retirement would naturally reduce with time. However, depending on when you retire, you may have to plan for their college expenses in advance. If your retirement coincides with the time your child goes to college, you may need some expert planning to ensure that one does not overlap with the other. People who wish to follow the principle of Financial Independence Retire Early (FIRE) and retire earlier than the traditional retirement age may have to prioritize retirement over the child’s education expenses. Keep in mind that while your children can take a loan and pay it back when they get a job, it may be a lot tougher for you to enter retirement with debt on your head.
You spend all your life saving up for your retirement. However, not many people pay attention to effectively plan their withdrawals also. Your retirement income can come from a number of sources, such as a 401(k) account, an individual retirement account (IRA), Social Security benefits, etc. You must be up to date about the taxation rules on each of these accounts. The right age to withdraw your savings also plays a critical role here. For instance, delaying receiving Social Security benefits can enhance the overall benefits substantially. Required Minimum Distributions (RMDs) also need to start from the age of 70.5 or else you will have to pay the penalty. All of these factors need some careful strategizing in advance.
Debt is never a good thing and more so in retirement. Walking into retirement with considerable debt can be a major reason for stress. The interest payments on loans can be hard to cover on a limited income. Moreover, the burden of having a liability when you are old can be a lot more than when you are younger. It is advisable to limit or eliminate debt from your life before you enter retirement. Try to plan your loan settlements and mortgage payments in a manner that you pay them back during your working years. This way, your retirement income and savings will only go into funding your primary retirement needs.
Having a foolproof estate plan ensures that your loved ones are secure even in your absence. A will can specify your wishes for your family and clearly state who inherits your assets after you. This ensures that your hard-earned money reaches its rightful owners and is not wasted in taxes, penalties, and probate. In addition to this, your estate plan can also contain your health directives and instructions on long term care in the event of incapacitation. In the case of minor children or grandchildren, a trust fund can be set up to take care of them and avoid misuse of your money.
Lastly, but most importantly, an easy yet effective way to relieve stress in retirement and be mentally healthy is to stay productive and occupied. Try to take up a part time job or pursue a hobby to keep busy. This will offer you an additional source of money apart from your savings and investment returns. Spending time with friends and family can also be a great motivation to enjoy the finer details in life. Remember that the golden years of your life are meant to be appreciated and enjoyed.
Following these basic steps will ensure that your retirement is comfortable and secure. This will automatically reduce any onset of stress or financial anxiety. As long as your retirement plan is comprehensive and takes care of inflation, emergency expenses, and medical costs, you have little to worry about.
If you want to make a wholesome retirement plan to avoid financial worries later, you can get in touch with professional financial advisors in your area.
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