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Retirement-Planning Paralysis: How to Snap Out Of It

It’s important to get past the fear and start taking action. / Getty Images

The deer-in-headlights feeling that many people in their 50s and 60s are experiencing as approach retirement is understandable, considering the extreme market volatility, stagnant economy and talk of pruning Social Security and Medicare in Washington.

But there are retirement-planning decisions within your control — and it’s important to get past the fear malaise to think through them. We described some strategies that are possible for people hoping to retire at some point can take now in a story in Saturday’s Wall Street Journal.

Here are three ways to fix derailed retirement plans:

Talk about retirement with your partner. Couples often have no idea that they’re making different assumptions about the age when they expect to retire, whether they will continue to work in retirement, or where they will live, according to recent research by Fidelity Investments.

Try to spend at least half the time thinking through retirement together as you do planning upcoming vacations, one financial planner suggests. Some online tools that can help get the conversation going include, or (click on “Relationships”).

Don’t bank on working indefinitely. Not to scare you further, but several financial planners interviewed for the story described the ways in which clients, mainly middle managers in their 50s, have had the rug pulled out from under them at work. In fact, one planner described a client being transferred from Wisconsin to Ohio before being let go shortly thereafter.

Think seriously about how you could convert your skills into some sort of part-time work that could bridge the gap to full retirement. Anything you can do to postpone starting withdrawals from your hard-earned nest egg will give those savings time to recover from any recent losses.

Plan for rising health-care costs. A private room in a nursing home costs $82,125 a year on average, according to the American Association for Long-Term Care, and could cost more than double that amount by 2030. But people who are 50 and older think costs will go up half that much, according to a recent survey by Sun Life Financial Inc.

When confronted with such statistics by financial planners, many older adults buy long-term-care insurance. But those in denial about retirement largely don’t. One option for people who otherwise can’t force themselves to start paying premiums: Adding a long-term-care benefit to an annuity or life-insurance policy. That way, if you’re among the 30% of Americans older than age 65 who somehow sidestep the need for long-term care, your premiums won’t go to waste.

Take a test run with the SmartMoney Retirement Planner.


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About Encore

  • Encore examines the changing nature of retirement, from new rules and guidelines for financial security to the shifting identities and priorities of today’s retirees. The blog also explores news that affects retirement, from the Wall Street Journal Digital Network and around the web. Lead bloggers are reporter Catey Hill and senior editor Jeremy Olshan. Other contributors include The Wall Street Journal’s retirement columnists Glenn Ruffenach and Anne Tergesen; the Director for the Center for Retirement Research at Boston College, Alicia Munnell; and the Director of Research for Pinnacle Advisory Group, Michael Kitces, CFP.