As retirement approaches, it is easy to let some of modern life’s financial challenges and worries get you down. Often, these can distract you from the more tangible options available for your retirement such as pension withdrawal or reducing your working hours.
For instance, the rising cost of living, the monetary drain of kids and parents, wealth inequalities, and other financial pressures, can prove a considerable source of stress for many people. If left unchecked, these concerns can divert your focus away from your retirement goals, such as planning for the future, having a comfortable lifestyle, retaining your social status, or sharing your wealth with loved ones.
The good news is, there are ways to deal with stress as you approach retirement. Let’s look at some of the financial and holistic remedies you might want to consider.
Before delving into the potential cures, it is a good idea to consider some common causes of stress for people nearing retirement. That way, you might realise you are not alone in experiencing such anxieties.
After a successful career and lifetime of work, the milestone of retirement presents us all with new challenges. The unfamiliarity and uncertainty that accompanies retirement means that you are only human if you are feeling some additional stress.
More starkly, you might be concerned about existing debt or the need to take on more financial obligations. Ever-increasing prices for essentials such as groceries and utilities presents the prospect of higher bills. Everyone has their own unique money troubles to deal with, and the stress of these tends to worsen the nearer you get to retirement.
Regardless of the causes of people’s financial concerns, there is help available. For instance, the Citizens Advice Bureau (CAB), pension withdrawal, and consolidation loans can assist in differing situations. Releasing pension money early isn’t right for everyone as it will leave you worse off in retirement. But that doesn’t mean you can’t consider this as an option. Let’s look at each of these:
Often, alleviating the stress associated with finances comes down to getting the right financial advice. The Citizens Advice Bureau provides information and help for dealing with stress related to various money matters ranging from mortgages to tax.
One way to deal with specific financial issues is to take advantage of pension release. From age 55, you may be able to withdraw up to one quarter of your pension funds as a tax-free lump sum.
This money can prove a lifeline in certain circumstances, or reduce the impact of forking out for significant expenses such as a wedding, university education, home renovations, or others. Either way, it can eliminate much of the stress and worries you might have about how you’ll find the money you need.
Releasing pension money early is not right for everyone as it will leave you worse off in retirement.
Entering retirement debt-free is something everyone should aspire to. Unfortunately, many people are carrying significant financial obligations into their post-working years, with outstanding mortgages being a cause of concern for millions.
Over-65s carry the least amount of consumer debt compared to younger age groups (2% versus 9-26%). That being said, the stress of dealing with high-interest debts in retirement can be considerable.
One way to manage these debts is with a consolidation loan. However, the interest rate on such borrowing should be less than what you are paying on the separate debts, otherwise there is no benefit either financially or for stress management.
Regardless of understanding finances and being financially prepared for retirement, it is understandable to feel some apprehension as it approaches. Worrying whether your money will last and be sufficient to cover everything you want can physically manifest into feelings of unease. In these situations, pension withdrawal, consolidation loans, or other financial tool are unlikely to provide much comfort. However, there are some practical things you can do to manage or reduce stress. Here are a few to consider.
Keeping active will not eliminate stress entirely, but it can reduce its effects. Taking regular walks is excellent, not only for staying physically fit, but to clear your head and rationalise stressful thoughts
It is important to maintain a close support network of friends and family to help you overcome excessive stress. Remember the old adage, “a problem shared, is a problem halved”. Be open about how you are feeling with loved ones and those you trust. The chances are, some of them will have experienced something similar, either now or before, and may be able to help you find a solution.
With the stresses of modern life and a busy work schedule, it can be challenging to find time for quality relaxation. However, practising simple routines such as mindfulness, focusing on breathing, and guided meditation can pay exponential dividends in terms of managing stress.
If you are new to such activities, that’s not a problem as there are plenty of apps available to help you get started. For instance, have a look at Headspace or Aura for help with mindfulness. Paced Breathing and Prana Breath are two excellent free apps that will help you develop stress-management breathing techniques. And, for help with guided meditation, have a look at Ten Percent Happier and Unplug.
It is only natural to experience some level of stress and anxiety about finances as your retirement approaches. Just remember, you are not alone in having such feelings, and there are plenty of things you can do to reduce the impact. You can try some or all of the holistic tips and apps as a practical means of managing stress, and hopefully find the one that works best for you. You also have various financial remedies, such as financial advice, consolidating debt, or withdrawing funds through pension withdrawal. The important thing to realise is that stressing over finances doesn’t have to stop you enjoying the comfortable retirement you deserve.
We are authorised and regulated by the Financial Conduct authority. This means we can help you to make the best possible decisions when it comes to your pension.
