Do You Have Money Phobias?
- In addition to some of the stranger phobias like fear of knees, bees, chins, flutes, comets, and so forth, fears about money are more common and far less bizarre.
- A retirement survey from Transamerica lists the three greatest fears held by those heading for retirement: running out of money, reduced or nonexistent Social Security, and health issues requiring long-term care.
- Many times, people can overcome both realistic and unfounded fears through education, experience, and consulting with a coach or mentor.
- At Coyle, we commonly see people with one or all three of these fears around money. It’s important to self-educate, so you know about the options available for mitigating or eliminating these fears.
The other day I was looking up phobias and found that there’s a phobia for everything: wind, water, knees, snakes, and all sorts of other things. You name it, there’s probably a phobia associated with it. It’s just how we are as humans. As a society, we have a lot of various phobias. In fact, Transamerica released their 18th annual study in late 2018. It includes a retirement survey that explored the three greatest fears of those heading into retirement. The survey findings aren’t surprising:
Running out of money. People are afraid they’ll outlive their money. We see this fear all the time. Clients with millions of dollars come to us expressing a great fear of running out of money during retirement. On the other hand, we also have clients with hundreds of thousands of dollars who don’t believe they’ll run out of money. That tells us that this fear isn’t necessarily related to the amount of money a given person has—it arises out of how they believe their money may spend into retirement.
One of the interesting things about fears is that, many times, they are unfounded. Often they can be overcome with education and experience. By deciding ahead of time what they’ll do and won’t do, people adjust the way they see their money. In other words, they come up with a plan and, as a rule, they don’t end up running out of money in retirement.
Social Security becomes reduced or eliminated. It’s highly unlikely that social security will be reduced or eliminated within the next 20 or 30 years. Of course, I don’t know for sure, but the funds are there right now. The latest study shows it will last another 20 or 30 years even if we do nothing about it. And with Congress, it’s possible that they won’t do anything about it until it becomes a major crisis. Most likely, Social Security will continue to be around, at least for those aged 60 and older.
Declining health and needing long-term healthcare. There are ways to set up insurance to greatly diminish any worries in this area. If insurance won’t work, there are other things you can do. Certainly, healthcare issues do come up in life and we have various ways to handle these to ensure that the necessary care is available. These options include arranging home healthcare provided by family members or others; full-time care provided by professionals; or something in between. There are dollar costs along the way, but we can plan for those in advance. By talking about the possibilities and ways to handle them, the fears will be unfounded, hopefully.
Fears about money and retirement are real and they come up because people actually do have these things happen to them. That’s why it’s important to think realistically about them and get educated about ways to deal with them. Taking steps so that your plan is well-funded will go a long way toward making sure these fears don’t come to fruition. Until next time, enjoy.
Gary Klaben is in our Glenview, IL office and serves our clients who are now located all over the country. He has over 30 years of experience and is the author of Changing the Conversation, Wealth of Everything and co-author of The Business Battlefield. Whether advising his clients, mentoring his team, or coaching entrepreneurs, he is always simplifying complexity and motivating others to take the next action that’s right for them.
Learn more about TransformingWealth™ , our proprietary approach, designed to get your arms around the big picture so you can make informed financial decisions. Ask Gary about Coyle’s TransformingWealth Preview Meeting, and schedule a complimentary consultation and start living the Good Life Managed Well™.
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All information is from sources deemed reliable, but no warranty is made to its accuracy or completeness. This material is being provided for informational or educational purposes only, and does not take into account the investment objectives or financial situation of any client or prospective client. The information is not intended as investment advice, and is not a recommendation to buy, sell, or invest in any particular investment or market segment. Those seeking information regarding their particular investment needs should contact a financial professional. Coyle, our employees, or our clients, may or may not be invested in any individual securities or market segments discussed in this material. The opinions expressed were current as of the date of posting, but are subject to change without notice due to market, political, or economic conditions.