How to ensure retirement finances are not a cause of stress, anxiety, or depression?

Have you heard of Blue Monday? Conjured up by Sky Travel back in 2005, the company asserted that the third Monday of January was the most depressing day of the year.

The assertion was based on the travel firm’s own equation; a combination of weather conditions, debt levels, time since Christmas, time since New Year’s resolutions have been broken, and generally low motivational levels; however some have simply dismissed the company’s calculations as “ludicrous”.

Yet, whatever one’s opinion of Blue Monday, the event does prompt conversation about mental health. And it does so at a time of year that some people do find particularly challenging. 

January is often a month of planning, goal-setting, and projections for the year ahead – particularly in the form of financial planning. Consequently, January can prove to be a very stressful time for individuals. 

Anxious about finances?

Amidst a cost-of-living crisis, people’s future finances are a significant cause of stress. According to recent data, over seven in ten (71%) Britons are stressed about not having enough money to do the things they want to do when they retire.

Getting one’s retirement finances in order can be stressful for a number of reasons. A person may have difficulty creating and sticking to a budget, for example. Others may have trouble understanding the financial products or investment options available to them. Throw in uncertainty fuelled by soaring inflation and rising interest rates, and things become more testing still. 

Last year, My Pension Expert’s research found that 21% of workers aged 40 and above have delayed their planned retirement date because of the cost-of-living crisis.

So, what can be done to help people get a firm handle on their financial plans and, in doing so, combat stress and anxiety? 

Taking action

The earlier a person begins planning for retirement, the easier they will likely find future financial management. Indeed, beginning saving as early as possible makes it more likely that an individual will reach their goals and avoid financial uncertainty later down the line. 

However, it is also never too late to begin planning for retirement, as our recent blog explained: What to do if you are approaching retirement without a financial plan?

So, whether an individual is choosing to reassess their retirement plans, or kickstart the process, there are a couple of simple steps they can take to reclaim control of their future finances. 

Where to start

Conducting an audit is a great place for any saver to start when regaining control of their finances. From here, they can create a budget that considers their current income, expenses, and savings goals. 

Savers would be wise to also consider a strategy towards paying off any debt. Paying off debt can reduce stress and financial uncertainty, making it easier to focus on long-term planning. Additionally, it frees up cash flow, allowing individuals to put more towards their pension pot or investments.

Crucially, people must understand that the economy and financial markets can be unpredictable. The last few years have certainly taught us that. Therefore, regularly engaging with any retirement plan will give savers a clearer understanding of their financial position over time, allowing them to take the necessary steps to ensure they stay on track. 

Talk to an expert

There is no one-size-fits-all plan when it comes to preparing for retirement. There is a plethora of financial products, pension plans, and investment options. Sifting through information on all of them can be stressful, and perhaps overwhelming.  

Fortunately, Britons do not need to figure this all out for themselves. By speaking to an independent financial adviser, savers can find the products and strategies best suited to them, without worrying about doing all the legwork.

For example, My Pension Expert’s advisers review an individual’s complete financial situation, circumstances, and goals, and make tailored recommendations to make their retirement savings work harder and achieve their goals. From alternative investments to safe-haven assets, and flexible drawdowns to annuities, there are retirement finance options to suit everyone’s individual needs. 

The cost-of-living crisis has left many concerned about the future of their retirement finances. However, the key is not to panic, as this can lead to savers rushing into ill-informed financial decisions, which could leave them out of pocket in the long term. Instead, savers should remain calm and seek independent financial advice to develop a sustainable retirement savings strategy. Doing so will allow individuals to look to the future with confidence.

Let an independent financial adviser take the stress out of financial planning, and help you achieve your goals for 2023 and beyond.