7 Tips To Beat Retirement Planning Fears
If you think you are the only one with retirement planning fears, think again. Retirement planning fears is one anxiety that we all share. Unless you plan on getting another job once you retire, your income stops or at least shrinks, and that is a scary situation to be in. When your cash flow shifts gears, you start to get a panic attack. Due to the concern about making the wrong financial decisions, getting hit with unexpected expenses or covering rising healthcare costs, investing for retirement is an unnerving task for many people.
The best way to beat your retirement planning fears is to meet them head on. You do that by learning as much as you possibly can about investments and money management. You will make better financial decisions that way. Some investors may feel safe following the crowd and investing their money in whatever investment is trendy. But here’s a hot tip, that is not always your best financial move. When you follow the crowd and go for the current investment trend, you are assuming that the crowd knows more about investing than you do. And what if the crowd is wrong? If retirement planning fears do arise, reaching out to a financial professional vs your neighbors, family, friends or co-workers is your best bet.
Let’s talk about 7 retirement planning tips that you can brush up on in the event that you do need to call a financial professional. Learning about investing and investments will give you some information to approach them with.
Beating Your Retirement Planning Fears
#1 – Go Long
Invest for the long-term. Avoid the urge to get a short-term up tick in your investments so you can make some quick money. That type of investing will eventually come back to haunt you. When your financial statements show positive returns you naturally feel good. Try to avoid using your investments to get that feel good emotion. Go to the movies instead.
#2 – Save Your Emotions For Sad Movies
Emotional investors tend to panic when markets hit a negative cycle. They sell too early, before the stock or mutual fund has rebounded. Or they buy too late, after the market has already reached its peak. The better investment style is to be a steady-eddy. Keep the emotions out, follow the slow, but sure approach.
#3 – Diversify, Diversify, Diversify
By the way, did we say diversify? The best investment advice is to avoid putting all of your investment money into the same type of investment. You’ve heard it many times before, “don’t up all of your eggs in one basket”, now you know what it means. Spread your investment dollars around. A well diversified retirement plan would include investments that range from large cap to small cap mutual funds, bond funds, stocks and a cash equivalent such as a money market. Putting all of your money into stocks for example leaves your investments vulnerable to market swings.
#4 – Dollar Cost Average
If you dollar cost average you will sleep better at night. The random ups and downs of the market will not bother you as much because you will buy regardless of price. When you dollar cost average you are buying more shares when the price is low and less shares when the price is high. You are essentially averaging the price of the investment.
#5 – Never Stop Investing
Do not be discouraged when the market takes a dip now and then. Continue to invest even when the market seems to be in a perpetual slump. Just remember that no one cares about your retirement planning as much as you do. If you are not socking money away for your retirement, who will be?
#6 – Be Aware
Do not fall in love with your investments. If you did buy an investment when the price was on the high side and the value has dropped significantly do not be afraid to take a loss and sell it. It’s okay to procrastinate for a little while, just do not procrastinate too long.
#7 – Reach Out
If you need investment advice, get it. You may not be a whiz at investing, and that’s okay. You are better off asking for help than remaining in the dark and getting nowhere.
The Long Road To Retirement Planning
If you save for your retirement over your entire 40 working years, you will have more money that you know what to do with once you retire. The problem is that many people do not realize that until it’s too late. So it is not to have some type of investment fear when the market swings or the cost-of-living increases. All investors fear market gyrations; but successful retirement plan investors learn how to work around their fears, you can do the same by following the 7 ways to beat your retirement planning fears.