From Fear to Freedom: Mastering Your Finances in Retirement

Laura Nash, CFP® |
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Financial Planning Focus

Too many people are fearful of retiring. Yes, there are many who are counting down the days and are excited about their list of things they want to do and see. Yet there are still others who aren’t sure about how they will spend their time, what their purpose is now that they are no longer working, and whether their money will last.

Saving money in a retirement account starting in your 20s and for 40 or more years, is a long time to develop a savers mindset. Then suddenly you are retired and faced with maintaining a certain lifestyle without a steady paycheck. Switching your mindset from saving to spending means you must come to terms with letting go of the money that you saved for over a lifetime. Easier said than done!

Converting your assets into income can feel like a daunting task. It is important to note that “when” you retire can have a big impact on your assets. Retiring when the stock market is down compared to when the market is up can present long-term consequences. This is referred to as timing risk or sequence of returns risk. Having to sell assets in a down market means you are selling at depressed values, which leaves less invested to rebound when the market recovers. One strategy to mitigate this risk is to ensure you have enough cash on hand to cover living expenses, so you are not forced to sell assets during a downturn.

Another concern is excess withdrawal risk. Having more time for leisure means you may want to take that big trip that you have been thinking about for years or plan more outings with friends and family. While it is likely that occasional one-time big spending years will not have a lasting impact, continuous overspending during the early retirement years can lead to fewer assets later in life.

Single retirees, whether by choice, divorce, or widowhood, may face even greater challenges when planning for retirement. They lack the income redundancy that couples have. They may lack a support system, especially when it comes to healthcare needs and the rising cost of care. Planning for the unexpected is even more important to ensure that each dollar is spent on covering basic needs and excess money can cover the “like to have” items.

By understanding your expenses and the impact on your retirement nest egg, you will have the flexibility to adjust your spending pattern and feel more confident about the future. Spending needs change over time, so reviewing your budget periodically can help to identify where your money is going. If you find that you need to cut back, such as in a market downturn, you will be able to easily identify how to spend less. A cash flow analysis is an excellent tool to answer the question, “Will my money last through retirement?”

As a next chapter in life, retirement is supposed to be exciting, not worrisome. Creating a financial plan that helps to reorient your mindset from saving to spending is the first step to entering this phase without financial concerns.

Meet Laura Nash, CFP®

Read the May 2026 Financial Planning Focus:

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