Having a financial plan is essential for a comfortable lifestyle, whether you are approaching retirement or are already retired. But what if you haven’t prepared yet for retirement?
Should you find yourself procrastinating and not developing a long-term Retirement Plan (“PLAN.xls”), take heed. This can get you into serious trouble over the long run, with your post-work lifestyle possibly taking a hit in one of two ways: by either overspending or underspending.
There is a weird psychology that can cause a retiree to drag their feet on developing a personal financial strategy. They might worry that, if they know too much about how their finances will play out over time, it will either scare them or at least disappoint them as financial reality sets in.
Think of it as a distorted version of the old saying, “What you don’t know can’t hurt you.” So, retirees spend away, figuring that they will worry about it later.
However, in the case of retirement, what you don’t know CAN hurt you. Especially when time isn't on your side, and big financial mistakes are much harder to recover from since you aren't working (or as least as much as you were earlier in your career) and the lifespan clock is ticking.
Whether dealing with overspending or underspending, the irony is that you will carry a heavy burden of worry in either case. But what you are really searching for in retirement is, above all, peace of mind.
