4 Ways To Take Action Rather Than Rationalize Your Retirement Hurdles


Retirement waits for no one; it’s coming fast for the youngest Baby Boomers and oldest Gen-Xers. The stark reality is that many people are not ready, and studies show that more than half of us wish we’d saved more and had a solid retirement plan. With retirement looming, financial stress is a constant companion for 57% of people, according to PwC, and 63% of us can’t cover a $500 emergency expense, let alone think about retirement.

One natural stress response is what psychologists refer to as a defense mechanism—chief among them is rationalization. Rationalization is when we cope with something that causes us discomfort by justifying our actions (or inactions) with what appears to be a logical strategy or story to move forward.

We all rationalize every day for all types of issues.

In the quintessential Boomer movie The Big Chill, Jeff Goldblum’s character says, “Don’t knock rationalization; where would we be without it? I don’t know anyone who could get through the day without two or three juicy rationalizations. They’re more important than sex.”

With all due respect to that iconic life observation, rationalizing retirement preparedness only relieves stress temporarily. Here are five retirement irrational rationalizations we often tell ourselves and how each of those stories may act as stress relievers but delay us from taking action to prepare for life tomorrow.

I Am Going To Work Longer

Working longer can certainly help financial security in retirement by adding income to savings and reducing the years drawing down on retirement income. However, our rationalization to work longer, which may be a real desire, can be derailed. Our health or the health of a loved one may make working full-time or even part-time difficult or impossible. Counting on this plan is risky business.

I Will Find Something Simple To Do That Will Help With The Bills

Many people choose to retire but believe they will continue to work. Not necessarily in the profession they have pursued for decades, but something here, something there for something extra. Something simple may be harder to find. Artificial intelligence is creeping into every part of the job market. Recently, I spotted a grocery store sign notifying shoppers that “Marty” was on duty to report spills, debris, and other hazards that may be in the store’s aisles. Unsaid, but it was clear that Marty was also watching for shoplifters. The thing is, Marty is not a retiree making a few extra bucks. Marty is an AI, a robot. From what I could tell, Marty isn’t looking to share his shifts. Finding something simple to do may not be as simple as many of us may hope.

I Will Figure It Out

The adage “I’ll cross that bridge when I come to it” is one of the most common retirement rationalizations. This also assumes relatively stable expenses in older age. Many people figure it out but also confront retirement shocks that disrupt retirement. Healthcare costs, home maintenance, and repair, and transportation costs may not necessarily ruin retirement security in the near term but may increase longevity risk – that is, where your lifespan is longer than your wealth span – forcing many retirees to reduce their daily expenses and quality of life.

My Parents Were Able To Do It

Yes, in many instances, our parents could make retirement work. Mostly, they also had pensions and a steady retirement income stream that few younger Boomers and older Gen-Xers will enjoy. Many of our parents did not live as long as the next generation of retirees may. Moreover, no one can argue that Boomers or Gen-Xers are as willing as the Silent and World War II generations to live frugally.

I Will Cut Back On My Expenses

Research indicates that the average retiree household cuts back on expenses while wealthier families tend to hold expenses steady. For those already living on tight budgets, what to cut becomes a challenge with real implications for well-being. For example, according to a Kaiser study, about half of people age 65 and older have not seen a dentist in over a year. Such a decision is less about showing off those pearly whites than the health implications that often accompany poor dental care.

Financial stress will likely increase as the last wave of Boomers and oldest Gen-Xers approach retirement. While rationalization may serve as a temporary salve to reduce the discomfort of not being retirement ready, taking action, even a little bit, will make you feel better and move you closer to the retirement you hope for. Here’s how.

Take Small Steps

Psychology research shows that even taking small steps can improve a sense of control. This might include speaking with an employer-provided retirement specialist or, for some, engaging with a financial advisor to do a retirement reality check.

Go For Small Wins

Taking small steps may lead to small wins that will reduce stress. For example, developing a retirement plan reduces uncertainty about what to do today and what may happen tomorrow.

Take Strategic Actions

Translating the plan into more strategic actions may include changes in spending behavior today and exploring investment options such as annuities, insurance, mutual funds, or other products that may reduce the feeling of stress but are very likely to move you into real and predictable financial security in older age.

Make Progress

Finally, taking action will likely lead to a cycle of good news and progress – that feedback will likely lead to a heightened sense of control, reduced stress, and fewer retirement rationalizations. Moreover, taking action will move you closer to your desired retirement rather than the one you fear.

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