Skip to content

How to Reduce Retirement Anxiety

Do you have retirement anxiety? If you worry about retirement you aren’t alone. It’s quite common to have anxiety about running out of money, what to do about health care expenses, when to take Social Security and retire, and even taxes. In this podcast episode we’ll address 8 reasons people worry about retirement and 5 strategies to reduce your anxiety.


Many have retirement anxiety because they are missing key pieces of a retirement plan. There are generally three questions I like to ask about retirement planning.

  • Do you have a plan?
  • Do you understand it?
  • How confident are you in that plan?

See, many investors have plans to grow their investments. After all, that’s how they’ve saved and prepared for retirement. But as you prepare to transition into retirement,  growing your investments is only one part of the process. There are 8 critical areas of retirement planning and when you don’t have a plan for each of these areas, anxiety naturally occurs.

Here are the 8 areas of retirement planning:

  1. Income Planning
  2. Protection and Safe Money Planning
  3. Asset Growth Planning
  4. Tax Reduction Planning
  5. Health Care Planning
  6. Estate Planning
  7. Legacy and Family Planning
  8. Fulfillment and Mission Planning


Preparing to retire can be a lot more daunting than most people think, as investors often have questions but don’t know where to start or how to get them all answered. The sheer number of questions and the magnitude of the consequences can paralyze families, causing them to do nothing and avoid the conversation completely, which is definitely a mistake.

Here are unanswered questions that can lead to retirement anxiety:

  • When should I retire?
  • When should I take Social Security?
  • How do I get the most Social Security possible?
  • How do I not run out of money?
  • How do I pay for medical expenses?
  • Can I afford to take that dream vacation?
  • Should I keep or sell my real estate?
  • How do I protect myself from market loss?
  • Should I stay with my 401(k) or move to an IRA?
  • How do I reduce retirement taxes?
  • How much do I need monthly during retirement?

Like anything successful in life, preparing for retirement will take work and being willing to ask the questions and then find answers can give you confidence and clarity, the opposite of fear and anxiety. Surrounding yourself with a competent professional team can also help you coordinate these decisions and how they will impact your retirement goals.


The root of the word decide is “cide,” which means to cut off or kill off. So when you decide something you kill off other choices. If you’re asking a lot of questions but not making decisions you can easily experience an increase in retirement anxiety. If you feel stuck, it’s most likely that you don’t have the right information so you can’t be confident in your decisions.

No matter your net worth and financial success, retirement anxiety can erode your retirement happiness and confidence. As I’ve sat across from accomplished individuals with more than a million dollars, they still experience worry and fear due to unanswered questions and indecision.


#1 - Create an Income Plan

As you retire, you’ll need to replace your paycheck with money from Social Security, pensions, and investments. Determining your monthly income needs during retirement and then creating a practical withdrawal strategy from your retirement assets is critical to reducing anxiety. 

You’ll need to determine when and how much Social Security will be coming in monthly, then calculate the amount of your income gap, based on a realistic monthly budget. Then you will need to decide how much to withdraw from your investments to fill that gap, while at the same time taking taxes into account. 

While there are many ways to create an income plan,  creating a plan that inspires confidence, reduces taxes, and reduces worry about stock market volatility is essential to passing the “pillow test.” The pillow test is a plan that allows you to sleep at night, even when life throws you a curveball, such as stock market downturns.

#2 - Design a Retirement Investment Plan

While working, the main goal for most investors is accumulation and growth. The goal is to invest so that your assets grow to the largest amount possible. Then as you transition into retirement you’ll move into distribution and withdrawals. This stage is about drawing down your assets for income, vacations, and emergencies.

Critical and often overlooked by investors and financial planners alike is the preservation stage. Here is my general rule on the preservation stage; if you need money for cash flow and income needs in the next 10 years it should be protected and invested differently. 

Withdrawals that fill your income gap are taken from preservation money, not growth money, which can protect investors from making rash decisions during market downturns. It can also protect investors from withdrawing money from depleted assets that are temporarily down due to market volatility. 

Money not needed for more than 10 years can be invested with an emphasis on growth. When the market is growing, investors get to participate. When markets are down, investors have the peace of mind of knowing they don’t need access to those funds for a number of years and thus can pass the pillow test. Of course, please invest according to your risk tolerance. Having an investment and income plan in place that accounts for all types of market conditions can have a significant impact on retirement anxiety.

#3 - Create a Tax Reducing Strategy

The risk of taxes going up in the future and ever changing tax laws, especially with a new president in the White House, is a significant retirement risk. At the stroke of a pen, Uncle Sam can change the amount of money he’ll keep of your 401(k) or IRA in retirement. No matter how much you’ve saved, if you’re in tax-deferred accounts, the government has a lien on a portion of your nest egg and you will have a tax bill.

We’ve identified over 21 potential tax strategies during retirement and creating a plan around reducing retirement taxes proactively can give you large doses of Vitamin C (C stands for confidence). 

#4 - Make Informed Decisions Around Health Care and Estate Planning

How will you pay for health care expenses during retirement? Inevitably, there is only one way to get into this world and one way to get out. Eventually, health will decline and medical bills will result. Beyond Medicare, how will you pay for these expenses, such as assisted living? Making decisions now, instead of later, can greatly reduce your retirement anxiety.

While the federal estate tax is set extremely high (11.7 Million as this podcast in 2021 for married couples) and most families won’t be impacted, being proactive about avoiding probate and reducing estate fees and concerns can still be an important way to reduce anxiety. Probate can often take 9 to 24 months and cost large amounts of money. You may want to consider a trust. 

Another key estate planning tool is to have a medical directive in place around end of life health situations around medical treatments and interventions. Difficult decisions often need to be made and not being prepared can put undue stress and discord among those you leave behind.

#5 - Create a Plan Around Family and Fulfillment

After your big retirement day, people are often surprised about the need to reinvent themselves during their retirement years. Often, retirees see retirement as a destination instead of a new phase of life.

What kind of legacy do you want to leave behind? How do you create a retirement you absolutely love? Do you have plans on giving back to your community? How can you create both a financial and lifestyle plan? After all, retirement is more than about the money.


Reduce your retirement anxiety by creating a retirement plan, either by yourself or with the assistance of a fiduciary comprehensive planner, who can help you be confident about your retirement transition and financial plans.

Create plans around all 8 areas of retirement and then get your questions answered and make critical decisions. After doing this, you’ll find that your worry and fear about your retirement years can be greatly reduced.

Are you looking for a firm committed to not only helping to achieve your goals financially but also with your family and fulfillment? You can set up an appointment by calling 801-810-8434. Do you have questions about when to take Social Security and how to maximize your benefit? Take our free online Social Security Masterclass.