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Retirement sounded so great to me a few years ago. Now as I face the reality of it, I find myself having panic attacks. “No more income? I will end up a homeless bag lady on Main Street….” I find myself thinking.
All irrational thoughts since I will have a COLA pension supplemented by my savings and will receive social security in 18 months. These revenues will come close to matching my current net pay when I start social security.
I had planned on working until age 70. But with the ageism I face at work it’s time to go. Also, at the age of 68 I’m just tired. But a part of me is disappointed in myself for not working until age 70.
I have many projects and activities I plan to pursue in retirement. I’m not concerned about what I’ll do, but how to pay for it.
As I consider retirement I can’t help but remember that both my mother and my maternal grandmother died at age 84. My father died at age 86 and his mother at age 92. How long will I live?
Money was a charged issue in my family. Basically, my father expressed his love for his family by supporting us financially. As a child of the Great Depression, it was his way of keeping us safe and secure. Even now, I find myself feeling that buying an expensive gift for someone is a way of expressing my affection.
But I remember back when my closest friend got me a birthday present. It was a teal highlighter. We were both college students with little money. Although the highlighter did not cost much, it touched me that she had noticed that my favorite color was teal.
But teal highlighters will not pay the rest of my mortgage, which is $150,000. And I still have to get the landscaping done which I hope to pay for with my current liquid accounts.
I find myself unprepared for this transition. I plan to go to the Enrolled Agent who does my taxes for a retirement check-up. But there is still that emotional component.
How have you dealt with the emotional aspect of cutting off the paycheck and the work identity?
You are a walking contradiction. You say you worry about no income, then you say you will have the same exact income when you retire. Just do it. I love retirement. I am an A personality and I thought I would never stop working. Retired 10 years ago and still love it. I have no pension, as you do. My only income is Social Security. But fortunately I was in the financial services industry and made a lot of money. Now I have more than I could ever spend. I love being able to do what I want when I want.
KT: I am 10 years into retirement, but remember clearly having the same financial concerns as I approached retirement. How to keep the money we had safe? Would we run out of money? Would we have enough to spend to enjoy our retirement? What about assisted care when we needed it? I suspect most people have similar concerns, but unlike easing your way into a swimming pool, one day you are at work and the next you are not.
10 years on, however, I offer that my experience has been just fine. We’ve seen our investments grow, but have not significantly changed our spending. The Pandemic certainly curtailed our travel plans, but it also allowed us to finally pay off our mortgage and do a few home improvements.
Having enough money in retirement is important, but as you anticipate that your cash flow will be roughly equivalent to your work income, you should be fine. The more important issue may be: what to do with your time? Going places and spending time with friends and family becomes important. Taking care of yourself – being physically fit and practicing good health habits is even more important as you could easily have 20+ years of active retirement.
Take a deep breath and make the leap into retirement. I think you’ll be fine.
Somehow I was able to make the decision to ease into retirement. I went from full time to part time, to easy time. Easing into retirement worked for me, as I did it over a 15 year span or so, and fully retired at age 78. The important thing is to make retirement work for you. If you saved well and grew your IRA’s, along with easing into retirement, you will take the panic our of your life.
KT, I can relate to your post. We are 18 mos into our retirement and it has been an adjustment. So far things have been ok. Spouse and I are doing the finances now and it it is good to have 2 sets of eyes on things. Also, Spouse was able to work part time last year to help with the transition. They quit this year since we started turning on our various retirement income sources. I want to encourage you that you will be ok. Talking to your trusted enrolled agent is a good idea, I think. Chris
Not sure why you got a down vote. Thank you for the encouragement, Chris. I’m sure it will be an adjustment for me.
Hello kt,
I recommend reading three books. They aren’t financial but about women who faced unusually hard circumstances and survived. You may find them inspirational in dealing with fear. When you feel overwhelmed, dip into one of these. Sometimes it helps to address a fear sideways.
All This and Heaven Too – Rachel Field
This is a novel based on a real life true crime case. A French Duke murdered his wife in the 1800s. It was believed to be because he was in love with their governess. The governess was questioned and let go. Never charged with any crime, she married an American minister who believed she was innocent. Rachel Field was their great-niece. I did not consider this a true crime novel but a novel about what happens when an event divides a life into two parts.
The Salt Path – Raynor Winn
The true story of a couple who are evicted from their home shortly after finding out the husband has a terminal illness. They decide to walk the South West Coast Path to figure out their next steps.
Wild – Cheryl Strayed
Another true story with a walk. Strayed walks a portion of the Pacific Crest Trail after her family falls apart. Her mother died of cancer at 45. Her stepfather, then 37, found someone else within a year and she and her siblings each go their own way. She also goes through her own divorce. So she decides to walk to figure out her next steps. Oh, she’s only in her early twenties when all this happens.
There are times when she literally has two cents or nothing. The walk was in 1998, so she mailed herself cash at POs along the trail. One time she put no money in one of the boxes by mistake.
Good luck.
I note with interest your recommendation of The Salt Path. Right now staying in an apartment that has a copy along with two sequels. Also the SWCP is a few steps away and we’re spending a lot of time on it so it’s a great vibe to read it in.
Hello Michael,
Winn and Strayed were at very different points in their lives when confronting fear. Winn and her husband were middle aged, losing their home and livelihood and confronting illness. Strayed, in her early twenties, knew she could get work again easily, but lost her family. Both found walking itself to be therapeutic.
If you are in the UK at the moment, Field’s book was in the top ten requested books in the library that was in the underground Tube during the Blitz. Field also won a National Book Award and a Newberry Medal (though not for this book). Enjoy the SWCP!
I guess we can learn a lot from other people’s journeys. Thanks for the suggestions.
KT, I have found that my concerns about my planned retirement in 3 years have reduced as I have become more confident that I have considered and planned for, as best possible, all the issues. To try to not miss issues and possible solutions for them, I rely on learning from others, experts in the field and those with actual retirement experience, by reading as much as possible and studying what they say, and then, since there are differing viewpoints on many issues, determining what solution/approach appears best for myself and my spouse. Three great sources I suggest are: Humble Dollar articles and forum discussions; Christine Benz’s book “How to Retire: 20 lessons for a happy, successful, and wealthy retirement”; Wade Pfa’s book “Retirement Planning Guidebook: Navigating the Important Decisions for Retirement Success” 2025 edition. The table of contents of these books are a list of the major issues you need to be considering. Knowledge in these topics discussed will also allow you to be better able to engage with, and evaluate the advice received from, professionals you choose to work with, rather than blindly assuming they must know best.
Thank you S_Carver. I will look into these books. And I have been a fan of Jonathan and HD for many years.
KT, I am close to someone who had similar concerns and fears about retirement. They ended up using an excellent local financial planner to build a sound plan that has successfully worked for them. If you have access to a qualified, recommended financial planner that is probably worth considering for an assessment of your retirement plan.
One thing I’ve learned from my interactions with this person is that my way of approaching a problem doesn’t necessarily work for others. I like to analyze and consider multiple scenarios. This greatly helps me understand a problem and gain insight. But it can overwhelm others. This person occasionally comes to me with questions. I find I’m much more useful if I listen respectfully to their concerns, ask a few qualifying questions, and answer just the question of the moment.
I found stopping work at 60 to be emotionally challenging, even thought I had a decent pension. I missed earning an income. I was able to move into a nice consulting role for a few years which helped quite a bit. I’m also lucky to have a knowledgable group of family and friends I can talk to about these kinds of issues, Engaging with the HD community has also been tremendously helpful. It’s an amazing group of smart, experienced, and caring people. I’d be happy to help in any way I can.
Thank you Rick! I really appreciate all the suggestions and support here. I just may try to find a good financial planner. I’ll start with the enrolled agent.
I think John makes a good point below of seeking help if you need someone to help you with your fear. I wonder if you are actually experiencing panic attacks or instead feeling panicky and nervous about this transition, which is understandable with life’s events that John describes. What I have always done to feel more secure in times of financial insecurity is to think of what I can do in the most dire of financial circumstances — increase income or decrease expenses. I know that I can always cut my expenses and live on “rice and beans, beans and rice” if need be. I also could probably bring more income in – like offer a dog walking/care service in the community for example. Having a “worst case” plan in mind gives me peace. With a pension and Social Security that you say almost completely replaces your current income, it sounds like you won’t need to do either. Thoughts (and feelings) are not facts and numbers don’t lie. I hope you can lean into your transition into retirement and focus on the wonderful opportunity that retirement brings. Your days will now be yours to command.
Thank you for your kind words, Jan. You’re correct that I can always find another job to supplement my income if I need to. Of course getting another job entails getting used to a new environment, people, etc. Not sure I want to do that, but I can if I need to.
kt, I do hope that I didn’t sound like I think you should or would need to supplement your retirement income via a new job. I am only sharing what type of thinking works for me when I find my anxiety ratcheting up when I start focusing on all of the “what ifs” of an unknown future. As Rick shows in his reply, this HD community is very supportive and helpful. I look forward to your updates as you decide when the “right” time for you to transition to retirement. And I wonder if reducing your hours at your current job would be possible to help you with that transition?
Retirement is a big transition in one’s life. But I assume you have made others, too. Such as high school to college, and college to the working world. Perhaps being single to being married. The loss of parents. Life is full of such transitions. Some of them are difficult.
Which brings me to my advice. If you are having panic attacks, I would suggest speaking with your primary care about them. She may think you need to speak with a therapist, or perhaps give you something to ease the attacks, or some other approach. And as others say, I think you should find a financial advisor to help you better understand your financial situation. I think the fear of the unknown is perhaps driving some of your anxiety. A financial advisor can tell you what’s what.
In any event, speaking with a health professional and a financial professional may be beneficial.
So am I so unusual to have these fears?
We have these fears. We’ve always had income. Usually the income paid our expenses. Our mindset since we were kids was to save more thsn we spend. Looking at retirement, it will require an entire reversal of our way of being to watch our assets drop as we spend. I manage my mom’s money now. Part of this is so that she doesn’t have to see the balance dropping in her accounts because it causes anxiety. Because this is for her, it doesn’t make me anxious, but just thinking about when this is for myself makes me anxious.
Not at all. It’s all about how you attack your fears. Lean into them and try to solve them, either in your own mind, or with help. The help can be either/or a financial advisor to do the calculations to show you where you stand, and/ or a therapist if you are having anxiety about where you stand heading into retirement.
One reason I calculate both our portfolio balance quarterly is because we are living off our portfolio for up to eight years if possible before both claiming Social Security at 70. Five and a half years in and doing OK. As I have written before I have a backup plan of my wife claiming after she reaches full retirement age in six months if our portfolio drops to (admittedly) certain level.
I have found having a plan helps to minimize, not eliminate, anxiety when facing a problem. The biggest difficulty is not being able to control everything in life.
When thinking about your savings outside of your pension/SS, are these funds invested or really a savings account? What % would you be drawing down during the 18months before you begin SS? We might be able to offer you stronger words of support depending on what you say….Everyone, even the wealthy, have fears when thinking about crossing the Rubicon of retirement. For some fears might be justified, for others no so much….
I’m invested in Index Funds, except for the GE stocks I have held onto due to Loss Aversion. But it’s not a substantial part of my investments
Retirement is a big adjustment. It’s important to spend time thinking and talking about all aspects of it, not just about personal finances. Keeping connections with friends and establishing a new daily and weekly structure really helped me in my first year, and still helps.
Stopping work before your goal naturally brings feelings of regret, but at 68 consider this: you’ve worked longer than most retirees, by far! As Norman suggests, some people really enjoy a smoother transition to retirement by working part-time, either at their old employer or a new one. Jonathan is a big fan of this. It may work well for you, or it may not, but it’s worth considering if you’ll have anxiety from a budget that feels too tight, especially until you start Social Security benefits.
And starting Social Security now, well past your full retirement age, is not a bad thing. Sure, there may be advantages in delaying to age 70, but only if you have ample savings to cover that without stressing about it. Again, the goal with money is to be reasonable and do what’s right for you.
A short consult with a Certified Financial Planner, who does fee-only advising, would likely help address any money worries in your plan. A tax accountant would usually not be an ideal retirement plan adviser unless they’re also a CFP.
David these are great points.I also have to consider the toll on my health. I really like the idea of going part-time I’m pretty firm on waiting until I’m 70 to start SS I have considered converting some of my traditional IRA to a ROTH. Kathy T
Whether to convert, or how much to convert, can be a tricky question. That’s a good one to discuss with a certified financial planner when you meet.
When you say “These revenues will come close to matching my current net pay when I start social security.” Are you comparing net after taxes of the revenue with your net pay?
Are you sure your issues are emotional as opposed to financial?
Good questions Dick. I will definitely be in a lower tax bracket. My current tax bracket would be higher if I wasn’t contributing the maximum amount to my 457. I have also been paying an extra $5000 a month towards my mortgage. Also I spent a lot towards the house remodel. And will pay for landscaping before I retire..These are all expenses I won’t have in retirement
Retirement requires adjustment. I decided upon a gradual, phased retirement, reducing my annual hours in step changes. The provided me the time to do other things, including travel and the financial means to do so without drawing from retirement funds. I continued to fund my Roth too.
It took several years of planning and pre-positioning on my part to prepare for this. Health is a factor, too.
Norman, working part-time is a consideration for me. I don’t know how long I will last at that but I am considering giving it a try. But I would need to supplement my salary with some of my savings. It definitely is something that requires adjustment.
I also felt the “age discrimination” and fatigue you described, and I wanted to work as long as possible. The pandemic gave me a way out at 63, when my company restructured and offered small exit packages. I had been tracking spending and retirement accounts for several years and knew the spreadsheet told me I would be fine. Still, it was unnerving in the beginning to no longer receive a paycheck. Covid was still circulating so I used the time to set up my post-retirement financial routines. I confirmed my “income” sources and expenses and savings for future. It is never a “guarantee” but I feel as secure now as I did working. I loved working but I also love not working. Today I could not be happier.
S, great comment. We used to respect the senior employees but now it seems like they are considered obsolete and resistant to change.
I tracked my spending over a year, keeping every receipt I got. I’m entering it by hand in a budget–wish I was a spreadsheet wizard. My hand-written spreadsheet won’t be perfect but it will give me an idea of my expenses.
One of the first things I noticed was when the markets dropped (as they often do). In the past, I would have said I will just work longer to make up for it. Without that option, I became rather anxious realizing that my pension, SS and savings were all I had. I have since gotten over that anxiety, but it was a surprise at first.
The other thing I will say is the later you retire, the greater risk of your inability to do all the things you are planning for an active retirement. I retired at 66 in good health, but my wife’s health and compromised mobility limited the things we could do together.
Jerry, I agree. And the fact that my parents and grandparents died in their 80’s has me wondering if I should even worry about living until 100. There’s a lot of cancer in my family.
Emotional readiness is totally different from financial readiness. I absolutely would not be “disappointed” about not making it to 70, think of those 2 years as the most active enjoyable ones you will have in the rest of your life.
And matching current net pay sounds like plenty – assume you are currently paying mortgage from that so that can simply continue. Go and worry that you didn’t retire early enough instead.
Yes, I definitely worry that I will not be in any shape to do the things I want to do. I am quite active and want to do a lot of traveling.
I do not feel I can match my current paycheck until I start drawing SS which will be in 18 months. But most of my income has gone into remodeling the house and now the landscaping, projects that will be done when I retire.
Kathy T
An important point is not worrying about replacing your net income, instead it should a question of “can the inflows meet the expenses with a bit of margin?” If they can, then the net income replacement doesn’t matter much here.
I know I can retire now because my projected expenses will be met by a combination of social security and a modest drawdown from my 401ks. I can’t retire now because the bridge to Medicare s too large since I am only 54. Enjoy the next chapter, you’ve earned it!
But doesn’t that assume a significant change in expenses upon retirement? Otherwise replacing income gets you to the same place. If expenses don’t change significantly in total, targeting income replacement seems easier. Even safer of expenses decline.
Have you considered a ACA plan before Medicare you could receive subsidies.
Mike, one good thing is my health coverage will be good. That definitely is important.
Kathy T
Good luck with your retirement! I’m only two months ahead of you, but my transition has been easy, and I’m really enjoying it. I’d have been more reluctant if I still had a mortgage or other debts, to be honest. Hopefully, in a few months, you’ll be kicking yourself—not for working until 70, but for not retiring earlier!
Yes the mortgage bothers me. I was paying an extra $5000 per month to pay it off until recently. But once my SS kicks in I will resume those pay. My friend thinks I’m crazy for wanting to pay it off instead of keeping that money in my pocket.
This is exactly how personal finance is personal. Your goal should be to do things which are reasonable and right for you, not strictly rational. Getting rid of a mortgage before or early in retirement is very reasonable. It simplifies your cashflow and brings peace of mind, which is priceless.
The fear of letting go is the title of your post. Yes, finally “pulling the trigger” might be scary but it’s what you’ve been working and saving for your whole life. It sounds like you are in fine shape with a pension and SS replacing most of your net pay.
The enjoyment of retirement will quell any fears very quickly. Having things to fill the working and commuting time will greatly help with the transition and make you wonder why you didn’t do it sooner. You have the right attitude and you will be fine! Welcome to the best time of your life!
Thank you so much for the encouragement. My fear is the biggest obstacle right now.
Congratulations on the pension, that COLA will be a big help. Couple of points:
Rather than looking at salary, what about your expenses? Will any of them go away (saving for retirement), or go down (taxes on a lower income)? Or will the projects you have planned increase them?
I agree that a session with a fee-for-service fiduciary financial planner could be well worth the money. You want him to take a look at the whole picture, and run projections taking into account different estimates for return on investments and inflation.
Welcome to retirement!
Kathy, yes I have always saved the maximum amount for rent and of course I will no longer be doing that. While working full-time I saved enough money to remodel my house and now will pay to have landscaping done. So these are not recurring expenses. I will save on taxes, as you pointed out.
The biggest expense will be traveling, which I want to do up front while I’m still healthy enough.
Kathy T
Travel doesn’t have to be expensive if you avoid pricey cruises, tours and hotels. If you haven’t already read it I highly recommend Rick Steves’ “Europe Through the Back Door” for info on DIY travel. I used to recommend Lonely Planet guidebooks for budget travel, but don’t care for the new format – maybe your library has some older editions.
I’d absolutely agree with this but it does take a certain amount of courage and resilience to dive in. That’s why I’d recommend train touring round Europe as a first step. Rail stations are usually central to cities unlike cruise ports and it’s not hard to DIY without recourse to constant tours.
That said cruises can be a good value way of travelling provided the traveller guards against “cruise mentality” of buying expensive excursions at every stop rather than exploring themselves and restrains upgrade spending onboard.
kt – I was extremely ready to retire when I pulled the plug at 67. My wife is five years younger than me, but she retired about 7 months before I did. This was just as the pandemic was cranking up, and we endured the isolation very well.
We both had a list of long term and short term projects/activities. We maintained social connections outdoors (we invested in electric blankets and a propane porch heater for the winter months). Our church continued services online. We organized Zoom meetings with long-distance friends.
We knew our financial position was adequate to take these steps. It sounds to me like you’re just hesitant to take that first step. After you do, you’ll be fine.
Like you I have a list of projects and activities I am looking forward to pursuing.
Were you able to replace 100% of your net working salary when you retired?
kt – no. While working, our income far exceeded our cost of living, and we saved the difference. In retirement our income still exceeds our cost of living. A frequent topic on HD is the impact of inflation. Since a portion of our income is from Social Security, there is some COLA coverage. Social Security currently covers pretty much all our expenses, so the income from my wife’s retirement and my IRA are not required.
kt, I can’t speak to the emotions of retiring; for me it was a breeze. I do have a few thoughts to convey.
I think your EA is a good place to start. He/she can give you a good estimate of your future federal and state taxes. Hopefully your tax liability will decrease, giving you a bit more income than you expect.
After that you might consider a flat fee advisor, who may have some ideas that you have not considered. That may help to reduce any stress/anxiety you are feeling.
I wouldn’t feel too bad about not working until age 70; age 68 is pretty darned close. I hope you love retired life as much as we do.
Thank you Dan. I have always thought I wouldn’t need a financial advisor. But now I admit I’m ignorant about maximizing my tax-efficient positions.
And I’m 18 months away from 70. You’re right it is pretty close!
KT, use a fee only advisor and spend enough for them to give you a complete plan including cash flow, taxes, and if you need it, a long term investment plan for your tax deferred retirement accounts using low fee index funds.
If you find you are good shape financially then race forward into retirement!