Here’s What Spooks People About Investing in Retirement

Estimated reading time: 2 minutes

At Entrust, we’re big fans of Halloween. We like to dress up… as empty IRAs. Really, you wouldn’t believe the screams of terror that echo around our offices. It’s quite frightening.

All joking aside, we know that people have a lot of fear around saving for retirement. It’s a shame--fear is limiting, and where investing in retirement is concerned, limitations are the last thing you want. So let’s chat about what it is about retirement that gets you spooked.

Running Out of Money

The fear of running out of money is very common, and it’s not unique to retirement. Financial woes (whether real or imagined) produce the kind of anxiety that keeps people up at night. Keeping this kind of fear at bay requires one very simple, but also very critical solution: creating a retirement plan. Know how much capital you have, create a budget, and stick to it. Create contingency plans if you need to. It’s that simple.

Related Articles:

How Much Money Do You Need to Retire?

Creating a More Secure Retirement

Failed Investments

Some people worry that the stock market will crash and they’ll lose their nest egg, so they opt for safer lower-yield options, like investing in CDs. There’s nothing wrong with being conservative, but taking calculated investment risks can be an important part of building a healthy portfolio that will stand up to inflation long-term. If you’re worried about the resilience of your portfolio, diversification is a well-known strategy.

Investing in a Self-Directed IRA and investing in multiple assets classes is a great way to get started.

Keeping Up With Inflation

Inflation may be a fearsome thing, but it’s also one you can plan for. You can see from this calculator how inflation changes the value of money over time, even just 10 years has a significant impact on monetary value. Your savings alone are unlikely to provide you with an adequate quality of life in your golden years, which is why it’s important to invest your money in a retirement account.

Investing puts your savings to work and helps your retirement nest egg keep up with inflation. Inside a retirement account, your funds accrue interest and appreciate (rather than depreciate) over time.

Investing in retirement might seem scary, but like any other fear: the more you learn, the more you understand how little there is to be afraid of. If investing in retirement looks to you like a member of the undead reaching out from a dark corner--just get close to it. You’ll see it’s nothing more than some kid in a sheet saying, “Boooooo, boooooo…”