The Dictionary of Bible Themes defines worry as “A sense of uneasiness and anxiety about the future. Scripture indicates that such anxiety is ultimately grounded in a lack of trust in God and his purposes.”
Perhaps because worry tends to focus on the future, it’s something that retirees, or near-retirees, can quickly fall into. We tend to overthink every aspect of retirement (especially the financial ones) and then spend more time worrying about them when we don’t need to.
If we spend too much time thinking about the future and worrying that we didn’t plan well enough and that things may not work out as planned, we’re not putting God and his promises and assurances in his Word in their proper place.
Christians have received salvation through God’s Son, Jesus Christ. Having been given a great gift and shown a great love, how can we not trust him with every aspect of our lives? We can rest in his promises and trust that He will take care of us no matter what, even if we didn’t plan and prepare as well as we should or could have.
I’ve found these verses to be particularly instructive:
“Anxiety in a man`s heart weighs him down, but a good word makes him glad.” (Proverbs 12:25, ESV)
“Humble yourselves, therefore, under the mighty hand of God so that at the proper time he may exalt you, casting all your anxieties on him, because he cares for you.” (1 Peter 5:6-7, ESV)
I wrote an article a while back titled, “Could I Have Done a Better Job of Tax Planning Before I Retied?” I was” worrying” that I had to pay too much income tax on my IRA withdrawals and started regretting that I didn’t pay more attention to that when I was young.
As I investigated further, I realized that I had some sound reasons for doing what I did and that although I have to pay taxes, they are relatively low on average.
That got me thinking: There are many things that retirees can regret, anxiously consider, or even fear when they needn’t be. Here is a list of the ones I could think of and why you may not need to worry about them if you do.
I don’t want to be misunderstood: You and I could likely have done better in many of these areas, but just because they aren’t perfect doesn’t mean you should lose much sleep over them.
1.) Don’t worry if you are paying the lowest taxes you can in your current situation. If you itemize and take all the deductions available to you, or take the standard deduction (which is much higher than it used to be), plus any credits, and use tax-advantaged accounts and IRS rules (like Qualified Charitable Donations), then you’re probably in as good a tax position as you can be. Just monitor your marginal tax rate and new tax legislation that might impact you.
Further Reading: The New Tax Law (2017) and Retirement Stewardship
2.) Don’t worry if your investment returns aren’t sky-high. Retirement is more about stability and capital preservation than aggressive growth. You need some growth to at least keep up with inflation, but sequence of returns risk can be a real issue. Therefore, a steady, moderately conservative growth and income approach is often the best. As a retiree, your primary concern is income sustainability, not chasing high investment returns. Another reason not to be too concerned is that many economists predict that stock market returns will average 5 to 7 percent for the next few decades, not the 10 to 12 percent range we’ve seen over the last 20 years. If you average 6 percent a year, you get what the market gives you.
Further Reading: Do Bonds Belong in a Retiree’s Portfolio?
3.) Don’t worry if the market takes a temporary dip. Markets fluctuate. If your portfolio is diversified and aligned with your risk tolerance, you’re better positioned to weather those storms. Keep some cash to draw from when things really get crazy and some fixed income for intermediate-term needs. Then, you can let your stocks fluctuate; they seem to only go higher over longer periods, even though there can be a lot of volatility along the way.
Further Reading: Stock Market Volatility and the “Prudent Man Rule”
4.) Don’t worry that you’ll “miss out” if you’ve shifted from stocks to bonds or more conservative investments. You hear a lot about staying invested in stocks in retirement and for some good reasons. But protecting your nest egg is key in retirement. Sure, invest in high-quality stocks and perhaps put a little in slightly riskier assets if you want to. But you don’t need to chase risky investments to secure your future. You may miss a big stock market rally but also survive a market crash. If you’re appropriately invested in a diversified fixed-income portfolio in addition to some stocks, you’ll get a decent income stream and may see some capital appreciation if interest rates fall.
Further Reading: Invest and Retire Like Dave (Ramsey)?
5.) Don’t worry if you’re not beating inflation every single year. You want to keep up with inflation but might lag in some years. What matters is your overall strategy keeps pace over time and that it’s one you don’t lose sleep over. Inflation may be easy to keep up with when it’s in the 2 to 3 percent range but don’t expect your portfolio to keep up with an 8 or 10 percent increase in any given year. Consider asset classes that tend to do well in inflationary times but don’t make them the core of your portfolio.
Further Reading: Inflation: A Quiet Threat to Retirement Stewardship
6.) Don’t worry if you withdraw from your investments during a down market. This is inevitable unless you stop entirely when markets are down, which many people can’t do. But this is one of the reasons why we plan and diversify. Strategies like a cash buffer or bucket system can help you manage this effectively. If you can rachet back your withdrawals during a down market, all the better, but you still need money to live on.
Further Reading: The Cash Bucket Strategy: Issues and Alternatives
7.) Don’t worry if you’re paying some taxes on your Social Security benefits. No one likes doing it, but look at it this way: It means you have other income streams supporting your retirement—something many retirees wish they had. Also, depending on your additional income, you’ll pay taxes on no more than 85% of your Social Security. Although it may push you into a higher marginal bracket, your average tax rate will probably be much lower.
Further Reading: Will Your Social Security Benefits be Taxed?
8.) Don’t worry if Required Minimum Distributions (RMDs) push you into a higher tax bracket. It’s a sign you’ve saved well! Consider strategies like Roth conversions or charitable donations using QCDs to manage future tax impacts if those suit your situation. Also, remember that you don’t have to spend all your RMD; you can use some of it to pay the extra tax if necessary.
Further Reading: Thinking (But Not Too Concerned) About RMDs
9.) Don’t worry if you didn’t convert everything to a Roth IRA. Roth conversions aren’t always the best option for everyone. You’ve likely made the right choice if you’ve evaluated your tax situation and based your decision on fact, not emotion. Yes, tax rates may be higher in the future, but that doesn’t mean YOUR tax rate will be higher—that depends on your income (and its sources), not just what the tax rates are. Even if taxes are higher, you could be in a lower bracket. And your average (effective) tax rate in retirement will almost certainly be less than your marginal bracket when you were working and making pre-tax contributions.
Further Reading: Could I Have Done a Better Job Tax Planning Before I Retired?
10.) Don’t worry if you purchased an annuity or whole life insurance product. Someone has likely told you that you made a huge mistake. You may have made a poor decision depending on the product you purchased, but it is also possible that you have a reasonably solid product that has accrued some cash value, pays you dividends, or will pay guaranteed lifetime benefits, which can significantly help in retirement. If you’re concerned, ask a trusted advisor about doing a 1035 exchange.
Further Reading: Should Life Insurance be Part of Your Retirement Plan (Part One)?
11.) Don’t worry if your financial plan or investment portfolio seems “too simple.” Simple doesn’t mean inadequate. A straightforward strategy is often the most effective and less stressful. Complexity can make things more challenging to manage, less transparent, and more difficult to evaluate.
Further Reading: Include Financial Simplicity in Your Retirement Plan
12.) Don’t worry if you’re paying a reasonable fee for good service from a financial advisor. If they’re helping you stay on track and providing peace of mind, it’s money well spent. Preferably, you are paying fees in the <1.0% range and closer to .5%, but that can be hard to find. I think the “fee for service” model is superior to the “fee for assets under management.” I would avoid most commission-based fee structures due to advisor conflicts of interest; do business with a fiduciary if you can.
Further Reading: Financial Advisors – Part One: What They Do
13.) Don’t worry if you’ve made conservative spending estimates. Overestimating expenses is better than running short. If you find yourself with extra funds, that’s a good problem to have! Don’t be afraid to loosen the purse strings and enjoy your money. Plus, there’s a lot of good you can do with it as well.
Further Reading: Spending and Retirement Stewardship
14.) Don’t worry if you took Social Security earlier or later than others recommend. Your timing should reflect your unique health, financial situation, and goals—not generic advice. Even if you took it early, you’ll receive benefits for as long as you live, along with inflation adjustments. You must live quite a few years to break even when you delay benefits, so some people are better off claiming early.
Further Reading: Social Security Claiming Strategies–Which Camp Are You In?
15.) Don’t worry if you’re not leaving a large inheritance due to spending in retirement. Your savings are there to support your life first. Your family will likely appreciate you living well, even if that means they receive less of an inheritance later on. If you have something to leave behind, all the better. Whether you spend it all or not is a very personal decision.
Further Reading: Retirement Stewardship and Your Legacy
16.) Don’t worry if you occasionally need to adjust your budget. Life changes, and so can your financial plan. Flexibility is part of staying financially stable. Be prepared to assess your spending and retirement income annually and pivot when necessary, especially during times of economic stress.
Further Reading: The Game of Retirement Stewardship
17.) Don’t worry if you occasionally splurge on something special. As long as your spending is within your means, enjoying your money is part of what retirement is for. Be careful of too much impulse spending; it’s best to factor it into your plan if possible. But a little splurge now and then will not break the bank.
Further Reading: My Stewardship Practices – Part One (Spending, Saving, and Giving)
18.) Don’t worry if you’re holding some cash or low-yield investments. Some regret this, especially when the stock market is booming. The market will boom, and it will also bust. Having liquid, safe assets gives you flexibility and peace of mind, even if the returns aren’t impressive.
Further Reading: How Higher Interest Rates are Impacting Retirees
19.) Don’t worry if you’re not keeping up with every new financial trend or strategy. There is lots of noise out there that wants to attract you to the newest shiny investment thing. Sometimes, it’s worth a look, but tried-and-true principles like living below your means, diversifying, and staying the course still work.
Further Reading: Does Cryptocurrency Belong in Your Retirement Portfolio?
20.) Don’t worry if your net worth isn’t growing like it used to. In retirement, the focus shifts from accumulating wealth to using it wisely to support your lifestyle. Therefore, your net worth may be less after ten or twenty years of retirement than when you started. It will fluctuate based on the performance of investments and your spending.
Further Reading: Investing for Retirement (Part One)
21.) Don’t worry if you don’t have a nice fat long-term care insurance policy. Most retirees don’t. While it’s true that many retirees will require some care, statistically, it is for relatively short periods and not always in a skilled care facility. Your home equity is a good source of funds if you need longer-term residential care.
Further Reading: The Stewardship of Life (Part One): Long-Term Care
22.) Don’t worry if you still have a mortgage. Many retirees do. Hopefully, you factored it into your retirement spending plan. If it’s burdensome, consider downsizing to reduce or eliminate it.
Further Reading: Housing Decisions and Financing Options in Retirement
23.) Don’t worry if you still have some revolving or installment debt. Like the mortgage, you hopefully factored it into your spending plan. Still, it would be good to get it paid off as quickly as possible to free that money up for other things.
Further Reading: My Thoughts on “The Guru Gap“
24.) Don’t worry if you miss your career. Lots of retirees do. The key is to find meaningful, purposeful work to do in retirement. Christians can serve their church and in their community, volunteer at non-profits, or start a small business. Try a few different things and see what resonates with you.
Further Reading: Our Greatest Risk in Retirement
25.) Don’t worry if you don’t have everything figured out about living in retirement. Nobody does; if they tell you they do, talk to someone else.
Further Reading: The Stewardship of Godly Wisdom
Thanks so much for this thoughtful and helpful article.