5 Simple Ways Older Adults Can Ease Financial Anxieties

Lots of us worry about running out of money in retirement. Adopt these strategies to calm your concerns.

It’s not surprising that financial worries can go into overdrive when you’re retired or close to retirement. In fact, 72 percent of pre-retirees say they worry about running out of money in retirement, according to a 2020 Charles Schwab survey.

Some of that anxiety is a result of making the mental switch from spending your life building up your assets to having to spend those assets. But there are steps you can take to help calm those worries and better protect your financial future.

“Even though we know the future doesn’t always play out the way we plan for, it’s really helpful to consider and prepare for it and talk about worst-case scenarios,” says Cheryl Sherrard, a certified financial planner and director of financial planning for Clearview Wealth Management in Charlotte, North Carolina.

Whether you’re a few months away from retiring or a few years into it, use these five basic strategies to help you gain peace of mind.

Strategy #1: Do a Comprehensive Financial Plan

Comprehensive financial planning means sitting down with a financial advisor for a very detailed overview and analysis of your financial situation. Think of it like a full-body checkup for your finances. You’ll go over everything from cash flow and retirement planning to investments and estate planning.

A comprehensive financial plan can show you what your finances look like now and if you’re still on target to meet your pre- or post-retirement goals. If you’re not, this is a good opportunity to make some changes.

“If your main anxiety is running out of money during retirement, a financial plan can be very helpful,” says Lauren Gadkowksi Lindsay, a certified financial planner with Beacon Financial Planning in Houston, Texas. This is also a great time to make sure both members of a couple are clued in on their financial picture, since oftentimes one partner handles most of the finances, she says.

If you’ve never worked with a financial advisor before, seek out a certified financial planner (CFP), which means the planner has passed the CFP exam and has agreed to the CFP Board’s Code of Ethics and Standard of Conduct. Some financial planners charge a flat fee for their services, while others charge an hourly rate (usually between $100 and $300). To find a qualified CFP near you, visit letsmakeaplan.org.

Strategy #2: Slim Down Your Financial Life

Having too much financial clutter—several bank accounts, multiple credit cards, and a trail of old 401(k)s or IRAs—can leave you feeling overwhelmed. Closing and consolidating accounts can help simplify your financial life (and whole life).

“At the very least, whittle down your various investment accounts to one custodian (aka financial institution) plus a bank account to make things more streamlined,” says Brenda Knox, a certified financial planner with Financial Elements in Rolling Meadows, Illinois.

Strategy #3: Automate Everything

If you have a towering pile of mail sitting on your kitchen counter, setting up automatic bill pay can be incredibly freeing. You’ll no longer have to sift through old statements and wonder if you’d paid them or not. But automation isn’t just useful for bills. You should also make sure any sources of income are set up with direct deposit.

Knox also says that those who are retired can set up a monthly withdrawal from investment accounts to a checking account to pay for regular expenses such as housing, utilities, and health insurance. You’ll quickly get accustomed to paying your bills this way, and it takes some of the anxiety out of the equation, she says.

Not sure how to set up automatic payments? Ask an adult child, grandchild, or tech-savvy friend for help. If you’re not comfortable sharing your personal financial info with a tech-savvy friend or relative who can help get you set up, call (or email) the customer support contact on your bank statement or online account. Banks encourage customers to do their banking online—it saves them time and hassle, too—so they’ll be very happy to walk you through the process step by step.

Strategy #4: Set up Fraud Protections

As many as 17 percent of adults ages 65 and older have been victims of financial fraud, according to the Consumer Finance Protection Bureau. And those are just the cases that are reported. Being the victim of a scam or identity theft can be incredibly stressful and hard to fix. Your best bet is to be proactive.

Start by getting in the habit of letting the phone ring if you don’t recognize the number (remember, that’s what voice mail is for). Also, don’t click on links in emails, Sherrard says.

Three other things all older adults should do:

Freeze your credit reports. When you freeze your credit report, you’re restricting access to your credit report. When a freeze is in place no one—including you—will be able to open a new credit account. Don’t worry, you can temporarily lift the freeze if you need to apply for new credit.

To freeze your credit reports, you’ll need to contact each of the three nationwide credit bureaus—Equifax, Experian, and TransUnion. You can find their contact information at the Federal Trade Commission’s website: IdentityTheft.gov.

Set up fraud alerts for your bank accounts and credit cards. Most banks offer this for free and some even allow a family member to get alerts if a large amount of money is taken out of one of your accounts. Call your bank’s customer service number to find out what fraud protections they offer.

For credit cards, you can contact any of the three credit bureaus to request a fraud alert. This encourages or requires lenders and creditors to take extra steps to verify your identity, like calling you, before opening a new account in your name or making any changes to existing accounts.

Regularly review your credit reports. You do this to confirm your information is accurate and complete and to look for any suspicious activity that may signal potential identity theft. You can get a free copy of your credit report from all three credit bureaus once per year through AnnualCreditReport.com. Rather than get all three bureau reports at the same time, spread them out throughout the year so you can check in on your financial history more often.

5. Get Started on Your End-of-Life Financial Plan

“The whole topic of aging and dying can be a tremendous source of anxiety for many people,” Gadkowksi Lindsay says. But getting your end-of-life decisions in order can be very comforting. Some of the major financial decisions you’ll want to make, if you haven’t already, include:

• Create a will
• Name a durable power of attorney who can make decisions for you if you can’t
• Create a file of important legal and financial documents
• Review and update any estate planning documents you have already
• Review and update (if necessary) your account beneficiaries

In addition to having these legal documents in place, Gadkowski Lindsay also recommends writing a short note highlighting some of the key specifics for your family. The note can include the name of your power of attorney, where you keep your important documents, and a quick recap of any specific wishes, whether financial or medical.

“You may have already told your children or family members what you want, but in the face of grief, it can be hard to recall,” Gadkowski Lindsay says. “Always write it down.”

Want to take it one step further? Check out our guide to four things you should do now to prepare for your own funeral. It may seem strange—or a bit morbid—but that’s only because society has made death a taboo topic. It’s time to change that!

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