Why Do You Fear Retirement? The Answer Might Surprise You

[Ep 194]

In this episode you’ll learn:

• Why retirement fear happens even when you’re financially stable
• The biggest mistake people make when planning for retirement
• How to identify the three numbers that create confidence in your retirement plan
• A simple way to take action over the next 90 days and start making measurable retirement progress

Episode Highlights

00:00 Retirement Fear Anchor

01:07 Budget Is Your Plan

02:08 Why Tracking Certain Expenses Matters

03:57 Cost of Reality

07:49 Bank Account Budget Method Trap

10:31 Tracking Is Not Restriction

11:18 Three Key Metrics

12:00 Know Your Current Expenses

13:12 Know Your Retirement Savings Rate 

14:00 Debt Pay Off Desire 

18:16 How To Track For Retirement Success

Full Show Notes HERE

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Transcript

Are you laying awake at night worried about making retirement happen? You're afraid to even mention it to your spouse, and you honestly don't know what to do next. If that is you, this episode is going to help you begin to alleviate that retirement fear that you're experiencing and begin taking action, this is an action episode, that will help build your confidence.

So the fear that you have about retirement isn't because you fear retirement itself, it's that you don't have any anchors, something to ground you, something to help your mind know what is going on. So you don't have an anchor to your future, and you don't have an anchor to your current expenses, which you're thinking, "What does that matter?"

That is what we're discussing in this episode. With those anchors missing, when you try to think about retirement and making it happen, the fear just gets louder because you have nothing to hold onto. The greatest anchor that you can create now is what does your current life actually cost,

I've talked about this before in some other episodes about the cost of your reality. But you're not understanding what your budget is and so what your overall expenses are. You don't feel in control, and without that, you might be assuming a number when I tell you how to calculate what you need for retirement.

There is no anchor to make that number anchored in. So most people who are, not tracking or really relying on an app or something, you aren't struggling. You've been paying your bills on time. You're handling unexpected expenses without too big of a crisis. Now, we still need to address that.

But you're also not struggling with debt, so there has never been a big need in your mind to, number one, have a budget, and number two, to track, because you're fine, until you try to think about retirement So with this fear, you're trying to solve a problem because that's what, people like you do, and so you're consuming information that is creating a bigger fear.

In trying to solve your challenge, trying to solve this, "I'm not sure what to do," you are creating a bigger fear. And maybe, just maybe, you're like, "Okay, I'm gonna download a budget template," or, "I'm gonna try a new app," but really, lo- the more you think about it, you have no desire to actually use those tools because you don't feel like you're struggling that's the gap. That's the struggle in your mind. You're like I don't need to budget and track because I'm fine, but I do need to get to retirement." Understanding how those templates and/or apps, it doesn't matter what you use, provide what you need to get to retirement is what you're missing, and that's why you're not connecting, and that truly is knowing your total monthly cost of life.

Now, I add the of life, and I've talked about all of those irregular expenses, but if you're wondering how do I calculate my retirement number?" Head over to episode 190, How to Calculate What You Need for Retirement, and I walk you right through that. But keep listening to this episode, 'cause you're going to want to understand, maybe why you need to calculate these things or track these certain things.

Because what is keeping you stuck is you're like I don't need to budget because I'm actually fine," right? "I'm not behind on bills. I have enough money. I'm saving for retirement," ? All of these things, but what you're missing is that a budget isn't just for people who are struggling. A budget is actually a plan that helps you know your numbers,

and helps you set out where you're going and how to get there. Budgets are huge. I call them a budget outline inside my program, and I do this very first step. We just make an outline of what is going on, and we figure it out from there. So you're worried about whether you're going to have enough for retirement,

maybe you're saving, "Oh, if I'm saving enough, am I gonna have enough? How much do I need?" But you've never tracked your expenses because you use the bank account method, you look at your expenses. You're not overspending. You get to the next paycheck. Again, like I said, you're saving for retirement and you feel like tracking today's expenses don't support me in reaching retirement."

And I get that. I was also doing the same thing, using the bank account method, which I've talked about before- But when I got onto my retirement journey and I started budgeting and tracking in a way that worked for me, that is crucial, but prior to that, I couldn't see that I really could increase my retirement savings very easily.

If you remember and listened to my fir- my story, I shared how many times I would go in and I would reduce those down because I wasn't tracking them. I wasn't tracking my expenses. I wasn't being in tune with actually where my money was going. I couldn't see that if I shifted one or two expenses, I'd actually pay off my debt faster, and I could actually increase my retirement, that I wouldn't have to pull back,

so if you're thinking, "This doesn't apply to me because I'm doing okay," I am not gonna argue that you're doing okay. I was as well. But here's what I want you to hear: what doesn't get measured doesn't get managed. Now, I know that's used in the corporate world, and you probably cringed if you worked there, but it's very true.

Not knowing the specifics of your numbers means you can't make any changes to head yourself in the right direction, to anchor yourself, there is nothing to really anchor and head you in that right direction. So if you're dropping something out of the air without any controls, it just, is

You're dropping it and hoping it lands in the right spot. It more than likely is not going to, maybe one out of, I don't know, 50 times. Depends on what you're throwing down. But if you actually give it wings and a motor, i.e. some guidance, you have a lot more control, and you'll more than likely land exactly where you intended,

can be a little bit before, a little bit after, but really thinking about, "How can I anchor myself with this to give me the control and get rid of that fear in my head?" So I know many individuals, they think that tracking equals restriction with your spending. And I want you to know tracking your numbers does not equal you having to restrict your spending.

What it means is that you know where you stand, so you can move forward, it ex- explains everything. You know exactly what you're doing. No shame, no guilt. You know how you're paying your bills. You know how much money you have to spend, and everything else left over is shifted to either savings, retirement savings, or paying off debt, all of those things to help you create retirement So I'm gonna give you three things that's going to help you gain momentum on your journey so that you can better understand, number one, why you need a budget and other things to track besides just your spending,

because tracking is important, but tracking what is going to support your momentum, your actions, and your progress is what you need. So the first thing is making sure you know your expenses as clear as you can Because once you know this, you are going to get a better estimated retirement target number.

So that's the number you need to save to be able to retire comfortably. And if you're 10, 15 years away, the best way to figure out that number is by using what you're already doing today. As you get closer to retirement, three to five years, you start swapping these expenses to be truly retirement expenses and see how you're landing.

But I can guarantee you, as somebody who's walked the walk these adjustments are very minimal and still within par. Again we're giving it control, we're giving it direction. So really understanding what you're spending your money on today, that most of that is not going to change just because you go into retirement.

You have a few. But anybody that tells you otherwise, ask them if they've done this, okay? Because if they've done it and it was different for them, I'd love to hear. Okay, so number two is know your savings rate. What do I mean by that? How much are you saving for retirement according to how much you're making?

This is where it's crucial to n- have a number that depends on you, what you're making, not what somebody else really thinks that you are making. So knowing that savings rate, it's going to be a percent. I've talked about this before. But if you are somebody who is over 40, closer to 50, you wanna be at least at double digits.

I'm gonna now talk about that just a little bit more. But that is a really a good tracking piece. That's why I want you to know that, and that's another thing for progress. Number three, you need to know your debt desire. So if you think about expenses, your debt is an expense, and if you have it paid off before retirement, that's less demand of how much you need in retirement.

Now, whether you take on debt in retirement is something different, it's a whole different discussion, but really what I want you to know or what I want you to decide is do you want your debt paid off before retirement or not? And this can look like, "Yes, I want all my high interest paid off," or, "I want everything paid off except for the house," or, "I want everything paid off."

But that is your desire. That is your decision. That is what feels right to you. And knowing that helps guide you into measuring and creating your retirement number as well So once you have those three things, you're in a position to start making real adjustments with your money right now. But what I see individuals do is once they get this information excitement takes over and they try to do too much at once.

So I want you to step back and I want you to pick one focus for at least 90 days, right? That's how you're going to see progress, know if it's working, and basically put it into place if you're getting paid bi-weekly six times so that you know you're making momentum forward before you add something else.

It doesn't mean that you can't add something else. This was something I did on my journey. I picked one area, I really drilled into it, I got it working well, got it refined, then I jumped to another area and I did the same thing, and I repeated that over and over. So what is one thing you can do right now with my guidance in your ears?

Again, we talked about it a little bit, but I want you to calculate your retirement savings percentage How do you do this? You take your total monthly retirement contributions, meaning how much are you saving into retirement accounts, either coming out of your paycheck or that you maybe manually do, but it's in a retirement account.

Add those up and divide by your gross monthly pay. It's gonna give you a bunch of numbers. You know that decimal, move that decimal over to the right t- twice, if you forgot that. Sometimes you're looking at that and you're like, "I don't know what that means." Move to- move it over twice. The two numbers on the left side of that decimal is your percentage, and here's what I want you to think once you get that number.

If you're under 10%, I challenge you to get to 10% within 90 days. Hopefully, you're not that far off from 10%, but if you are over 40, this should be a minimum goal so that you're saving hopefully enough for retirement. This should be going out somewhere. So that is your goal. Get it to there by 90, within 90 days, whatever that looks like, so that you can then move on to something else.

Now, if you're like, "Okay, but I'm already at 10%," right? What I want you to do is we want to get to between 15 and 20. I say as much as you can because the more you're saving, the less you're living on. The more you're saving, it's compounding and growing, right? It's this double-sided effect. So if you're already at 10%, I want you to raise your retirement savings by 1% every quarter.

So if you think about doing that for a year, that's 4%. 4% is a safe withdrawal rate, without getting into another dis- discussion. So every year that you do this, you are adding to a safe with- withdrawal rate. Right? Not exact, but it kinda gives you that understanding of I'm creating one more year by saving for 4% another year.

All right. So what does success looks like? You've stayed the course for 90 days. You've tracked your savings percent every single month, right? So you know you're grow- growing up, going up, right? That is how you track for success. That is how you know that you're building your retirement savings. Inside my coaching, I have many strategies like this to approach from the three things I talked about in here, savings, debt, and expenses, and focusing on those every 90 days or s- quicker if they're small and you're making good progress.

And we keep repeating that. So that's what I want you to do, is- Watch for your progress and then choose another area. So for today's episode, I want you to think about what is one area I can take action on in the next 90 days? How can I track this area for progress and improvement? We're talking about tracking, but we're track- talking about tracking the right things that show we are getting closer to retirement.

Tracking these things consistently will reduce that retirement fear that has you awake at night. So again, what is one area you can take action on in the next 90 days, and how can you track this area for progress and improvement? I would love for you to head over to the Facebook community and share your answers.

Kind of a, "This is what I'm focusing on," and once you say it out loud it happens, or you feel like it's a little more tangible and people might ask you, so you do it. But also, I would love for you, if you're like, "I'm not sure and I'm not sure what to do," come to the group for support,

there's others, and they're also on the same journey as you, and I will also be active in answering questions and helping you find momentum forward. So if you're fo- focused on making retirement happen and you want to be surrounded by people who are on the same journey, come join the Facebook community.

It's the Retirement Ready Hub, a community for Gen Xers. There's a link down in the show notes. You can also DM me for the link either on Instagram or Facebook, and I would love to get you started finding progress. Let's get rid of your retirement fear. We'll see you next week.