Financial fears could be holding back millions of retirement plans (Copy) (Copy) (Copy)
Research suggests that around a third of retirees hold off making purchases because they're worried they could run out of money in the future. This is a valid concern, but it could mean that retirees are missing out on opportunities and the chance to live the lifestyle they've worked hard for.
In this blog post, we'll discuss how financial planning can help to reduce some of these worries through cashflow modelling. We'll also provide some tips on how to get started with financial planning.
The fear of running out of money
Many people are worried about running out of money in retirement. This is especially true for those who have not saved enough or who have not planned for their retirement expenses.
There are a number of factors that can contribute to the fear of running out of money in retirement. These include:
Inflation: The cost of living is constantly increasing, which means that retirees need more money to maintain their lifestyle.
Unexpected expenses: Retirees may face unexpected expenses, such as medical bills or home repairs.
Investment risk: There is always the risk that investments will lose value, which could leave retirees with less money than they need.
How financial planning can help
Financial planning can help to reduce the fear of running out of money in retirement. This is because financial planners can help you to create a retirement plan that is tailored to your individual needs and goals.
A financial planner can help you to:
Estimate your retirement expenses: This will help you to determine how much money you will need to save for retirement.
Choose the right investments: Your financial planner can help you to select investments that are appropriate for your risk tolerance and time horizon.
Create a budget: A budget can help you to track your spending and ensure that you are staying on track with your retirement goals.
Manage your risk: Your financial planner can help you to develop a risk management strategy to protect your assets from market fluctuations.
Cashflow modelling
One of the most important tools that financial planners use is cashflow modelling. Cashflow modelling is a process that helps you to project your future income and expenses. This can help you to determine whether or not you will have enough money to retire comfortably.
Cashflow modelling can also help you to identify areas where you can make changes to your financial plan. For example, if you find that you are not on track to meet your retirement goals, you may need to save more money or invest in higher-risk investments.
Tips for getting started with financial planning
If you are concerned about running out of money in retirement, it is important to start planning as early as possible. Here are a few tips for getting started:
Gather your financial information: This includes your income, expenses, investments, and debt.
Set your retirement goals: How much money do you want to have saved by the time you retire? What do you want to do with your retirement income?
Find a financial planner: A financial planner can help you to create a personalized retirement plan.
Conclusion
The fear of running out of money in retirement is a common concern. However, there are a number of things that you can do to reduce your anxiety.
By working with a financial planner and creating a comprehensive retirement plan, you can increase your chances of achieving your financial goals and enjoying a comfortable retirement.