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Imagine you’ve reached your retirement savings goal, but you’re afraid to pull the trigger at the end of your career. You’ve worked your whole life and saved as much as you could, but you still feel the compulsion to keep going, even though you’ve reached your financial goals.
If this is the case, you may be suffering from “one more year” syndrome.
After years of working at least 40 hours a week, the thought of all that freedom is enticing, but also worrisome. What exactly should you be spending your time on? Plus, the pressure cooker at work is where many of your friends are and a key part of your social network. Then there is the financial piece of the puzzle.
So what exactly is “one more year” syndrome? And more importantly, what is the cure?
Let’s say a healthy 60-year-old woman has reached her savings goal of $1.5 million—already well above the $1.26 million “magic number” many Americans think they’ll need to retire, according to Northwestern Mutual (1)—and is ready to quit her high-paying, high-stress job.
But she still hesitates. After all, another year of work means another year of retirement savings. In addition, she cannot apply for Medicare until age 65, and if she takes her Social Security benefit at age 62, she will have to receive a reduced benefit.
And so, even though he already has enough money to retire, he decides to work just one more year, which quickly turns into another year, and then another.
Soon enough, she suffers from “one more year” syndrome.
Read more: Approaching retirement with no savings? Don’t panic, you are not alone. Here are 6 easy ways to catch up (and fast)
Now that we know what it is, let’s look at the cure.
A good place to start is to manage your expectations. According to Morgan Housel, the best-selling author of books such as The Psychology of Money“the hardest financial skill is getting the goalpost to stop moving.” In other words, funding a secure retirement means recognizing when “enough is enough.”
But how do you actually know if it’s enough?
It can come down to taking your emotions out of the decision and doing some cold, hard math.
Let’s look at the facts. Generally speaking, using the 4% (2) rule, that $1.5 million portfolio should produce about $60,000 a year for 30 years, before taxes – but even that will depend on the return on the investment.
And don’t forget that he has other considerations. Will he get a pension? Does he have private health insurance or another option to bridge the gap until he can apply for Medicare at age 65?
In addition, he has to think about inflation and how it could destroy his savings.
Likewise, the math gets pretty complicated—she needs to think about her lifestyle after retirement and keep an emergency fund to cover any unexpected expenses. She might also have some plans for her retirement, like taking a long, well-earned vacation around the world.
And all these additional costs can add up quickly.
Still feeling overwhelmed? If you are, you are not alone – there is help.
A certified financial advisor can help you better understand your financial situation and how to improve it. One of the first ways they can help is by crunching the numbers to ensure you’re maximizing your retirement contributions to the best of your ability.
Research from Vanguard also shows that working with a financial advisor can add about 3% to your net return over time (3). This difference can become substantial. It means that if you start with a portfolio of $50,000, professional guidance could mean additional growth of over $1.3 million over 30 years, depending on market conditions and investment strategy.
But hiring an advisor can be a lifelong commitment that could make or break your retirement. That’s why it’s crucial to find someone you trust.
And this is where services like Advisor.com can come in. Their platform connects you with certified financial professionals in your area who can provide personalized guidance on your finances, no matter where you are in your financial journey.
How it works is simple: Enter some basic information, such as your zip code, and connect with up to three professional advisors in your area. From there, they can help you determine how many years you have left to invest before retirement and assess your comfort level with market fluctuations – two key factors in building the right asset mix for your retirement portfolio.
The best part? Through Advisor.com, you can schedule a free, no-obligation consultation to discuss your retirement goals and long-term financial plan.
Once you have the right financial advisor in your corner, you can start thinking about your next steps.
As you approach your golden years, you may be stuck in a dilemma — whether to work harder to grow your nest egg or retire.
However, even if the math shows that it might be beneficial for you to work another year, you also have to think about whether it’s really worth it, especially if you dread going to work and it affects your mental and physical health.
However, working 40+ hours a week isn’t the only way to build your bank account.
Most people spend a little bit of money every day, but daily investing can be harder to understand. So what if you could make a micro-investment with every purchase to grow your retirement nest egg?
With Acorns, you can stop feeling guilty about shopping and start spending your money in a way that can set you up for a richer retirement.
Acorns is an investment and savings platform that automates the process of saving for retirement by automatically investing spare amounts from everyday purchases and placing them in a diversified portfolio of ETFs managed by experts from leading investment firms such as Vanguard and BlackRock.
Here’s how it works: Every time you make a purchase with a credit or debit card, Acorns rounds it up to the nearest dollar and puts the rest into a smart investment portfolio. That morning coffee for $3.15? Now that’s an 85 cent investment in your future.
And the best part? Acorns can also help you top up your savings with recurring monthly deposits. If you set one up, Acorns can also give you a $20 bonus investment to get you started.
However, even as you build your retirement nest egg, remember – don’t put all your eggs in one basket. In other words, diversification is the name of the game.
For example, gold has historically been a key diversifier against inflation and economic risks. But it’s not always easy to get your hands on that precious yellow metal. It is also on a historic bull run, beating analyst expectations and hitting a high of over $5,000 per ounce at the end of January (4).
Fortunately, you can now invest in gold by creating a gold IRA with Thor Metals. Gold IRAs allow investors to hold physical gold or gold-related assets in a retirement account. This can combine the tax advantages of an IRA with the protective benefits of investing in gold.
Thor Metals is an authorized retail dealer for the US Mint and has partnered with IRS approved depositories. This means you don’t have to worry about storing your gold safely. Thor Metals will do it for you.
If that sounds intriguing, you can learn more by getting their free information guide, which also includes details on how to get up to $20,000 in free metals on qualifying purchases.
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Northwestern Mutual (1); Charles Schwab (2); Vanguard (3); APMEX (4)
This article provides information only and should not be construed as advice. Offered without warranty of any kind.
