For some, the dream of retirement overshadows the stress of its reality.

As the countdown to retirement begins, fears of being able to survive on a limited, fixed income in a world where everything is gradually becoming more expensive causes pre-retirees to worry whether they will ever be ready to retire.

Fear of the unknown and insufficient financial planning, both increase the apprehension of stepping out of the workforce, whether voluntarily or not, for many pre-retirees. For others, it’s the rising cost of healthcare and facing the inevitability of end of life planning.

Below are seven of the most stressful financial concerns pre-retirees generally have about their impending retirement.


Planning for the known is possible, but full preparation for the unknown and unexpected is challenging and at many times, impossible. From illness to major home or automotive repairs, unforeseen costs can negatively impact the limited income of a retiree. When the unexpected illness or death of a partner creates a chasm in retirement plans, the surviving partner must re-strategize and prepare both mentally and financially for their future.

Major repairs to the home or vehicles are stressful enough when pre-retirees are still working. Yet, due to the full income of employment, these expenses can be managed and the repairs completed. However, when one is on the verge of leaving a career and the comfort of a steady, reliable paycheck, unexpected costs cause increased stress when the same amount is now expected out of a much stricter budget.

They lack confidence in the size of their retirement fund and its ability to take care of most expected retirement costs, let alone the unexpected costs which are sure to arise in the future.

Finding a professional financial advisor is one step towards a secure retirement. These individuals will help pre-retirees to develop a plan for what they envision their retirement to look like as well as find a way to prepare for unplanned occurrences.

Together with the pre-retirees, the advisor will implement steps to increase health care coverage and increase savings goals from the six months of living expenses recommended for employed workers to 12 to 18 months.

For those able and willing, they can facilitate the creation of a separate fund for family trips, destination weddings, and other family fun events.


Of all seven on this list, completely depleting a limited retirement fund is the underlying fear causing the most stress for pre-retirees.

Determining how much money is enough to last through retirement so retirees can enjoy the golden years is an estimated guess, at best. The dollar, over time, loses its value, and living off more than interest depletes the nest egg principal.

Unexpected expenses, rising healthcare costs, vanishing pensions and Centrelink benefits are all factors to consider when attempting to calculate just how much is enough to live comfortably for the rest of one’s life.

As far as major life transitions go, retirement is one of the most life altering. It affects an individual’s finances, self-esteem, self-identity, and even interpersonal relationships.

Unfortunately for some retirees, retirement is a choice made for them and not by them. Health issues, familial responsibilities and changing work environments are all factors when someone is forced to enter retirement earlier than planned.

There are also those who have come to the realisation they are unable to retire when planned due to a lack of proper planning and saving.

Prior generations were able to retire with the safety net of a company or government pension to supplement their retirement savings in years past. Currently, these same pensions are on the verge of extinction due to declining benefits packages offered to employees.

For most pre-retirees, their identity as provider for their children and sometimes even senior parents is a part of how they identify themselves. However, retirement generally brings with it a change in financial status which can affect their ability to act as monetary safety net for grown children.

Having this conversation early on with adult children to cut the cord of financial dependence can limit unexpected expenses and protect limited retirement funds.

Funding an emergency fund early on in the planning stages will aid in ensuring unexpected expenses are not used to deplete the retirement fund and it can be utilized for the retirees to maintain some semblance of the lifestyle which they enjoyed during employment.


Many pre-and post-retirees half-heartedly joke they can’t afford to die due to inflated funeral costs, yet they can’t afford to live because of increasing medical costs and decreasing medical coverage for seniors. The impact on retirees due to rising out-of-pocket expenses for premiums and prescription drugs is palpable.

With each changing administration, government policies and priorities change regarding health care benefits.

The inability to rely on a consistent plan with set premiums and costs makes it difficult for pre-retirees to plan for potential future medical costs effectively. Relying on Medicare to supplement medical expenditures means even the most conservative and well-intentioned estimations will most likely fall short of actual figures.

There are government resources available online provide a breakdown of costs associated with Medicare for those in the pre-planning stages of retirement. These resources illustrate the costs for varying levels of coverage and financial status.

To ensure adequate funds are set-aside, and interpretation of plan requirements are met, it is highly advisable to review the Medicare website to educate oneself on the ins and outs of Medicare coverage before enrolling.



social security net is fadingHow secure will Social Security be down the line?

For the Baby Boomer generation, Social Security and pensions were touted as entitlements and assurances when it came time for retirement.

Sadly, the reality is both of these former benefits are on the financial endangered species list and those planning their exit from the workforce are left to almost fully fund their retirements.

While Social Security benefits were not intended to fund retirement fully, they were created to provide much needed income support for seniors, especially those with a limited income. Sadly, the amount of these benefits has decreased due to the increasing number of individuals submitting their claims for benefits.



As most pre-retirees plan for a future with a reduced and fixed income, those who are homeowners face the harsh reality where, just because they retire, does not mean their mortgage or debt will go away. Sadly, they will have to find a way to continue to pay higher mortgages on an even more limited income.

With the fluctuating housing markets, the equity in their homes rises and falls every couple of years. Many homeowners have borrowed against the equity in their home for any number of reasons including holidays, home or car repairs, medical expenses or to supplement their monthly income, just to name a few.

Ongoing debt from sources such as credit cards, medical expenses or financially assisting adult children can play a hefty role in increasing stress levels of pre-retirees and those already in retirement. Applying for consolidation loans, reduced monthly payments and using home equity to pay off other debt are all valid methods of addressing ongoing debt.

Working with a professional financial advisor to plan for and pay off ongoing debt can alleviate much of the unnecessary stress experienced by older adults. Understanding how variable interest rates, fees, and payment timetables can be adjusted and used to benefit the pre-retiree is just one way a financial advisor can work within the scope of an individual’s situation to provide relief they did not believe possible.


cost of living increasesHoping as the cost of living and inflation rise, salaries and Social Security benefits will increase as well is just wishful thinking.

Attempting to keep up with inflated costs on a fixed retirement fund budget negatively affects the purchasing power of retirees. When planning began, their financial roadmap may have aimed for one specific amount which would have addressed the mortgage/living situation, debt, pending car loans, medical expenses, possible unexpected expenses and to maintain a certain lifestyle.

Sadly, inflation is causing as many as three out of five middle-class new retirees to outlive their retirement funds if they attempt to maintain pre-retirement style of living. Pre-retirees will have to factor in an annual inflation rate of about 3% to ensure they do not outlive their retirement funds.

Researching the Consumer Price Index will provide additional information as to how much consumers are paying for goods and services now versus how much was paid for those same goods or services in years past.

Pre-retirees should also keep an eye on investments when gauging how inflation will affect their retirement lifestyles. Verifying value and all terms with the investment company or your agent can provide much-needed insight to protect your retirement fund as much as possible.


Planning for one’s end of life expenses is, certainly, depressing and stressful in and of itself. Trying to plan for what happens after death is even more stressful when funds are limited and focused on providing the living with necessities.

Arranging these discussions as early as possible can take some of the stress away from having to do so when the situation requires it. It cannot be assumed loved ones will automatically know one’s wishes or how final expenses are to be paid for. Preparation is key and having certain steps in place will ease the burden on surviving family members.

Completing steps such as health care directives including a living will which will expressly detail your wishes and completing a durable power of attorney for health care, which will appoint a trusted someone to determine health care in the case of incapacitation, will lessen the stress and alleviate the emotional toll on loved ones.

Next, consult with a legal representative to determine whether a durable power of attorney for finances, a living trust or a will is most appropriate for the circumstances. Ensuring finances are in order not only protects loved ones left behind, it also ensures wishes are respected.

Working with a hospice and social worker can help maintain the legal, ethical and moral expectations which can be missed when preparation is not completed ahead of time. It can also help to prevent unnecessary life-prolonging treatments which were not desired but implemented due to a family member’s inability to let go.

Reading or hearing an individual’s wishes in their own words can help those left behind to cope and process their guilt and sadness. Planning for end of life is not only a kindness to loved ones, it is also a benefit for those working to aid survivors through the entire process.

When it comes to retirement, pre-retirees have many decisions to make and a new world of opportunity to consider. While many choose to stop working altogether, there are many others who continue to work part-time to maintain a sense of purpose and supplemental income for their golden years. Preparation is paramount to preventing stress when planning for retirement and especially when it’s finally time to enjoy life.

Adapted from the original article here