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What stresses you out these days? For me, juggling work and family is the daily grind, but my underlying stress is largely financial — managing cash flow, paying off debt, saving for retirement.

You know, the basics.

Apparently I’m not alone. A recent Schwab survey found that retirement savings is the number one cause of financial stress for most people. The scariest part of this survey? Those questioned were all 401(k) participants!

Even individuals who are actively saving for retirement in some capacity are stressed about whether or not they’re saving enough and if they’re making the best investment choices.

While it’s important to spend time thinking about retirement, you shouldn’t feel substantial stress about it, especially on a daily basis. What you need to reduce stress isn’t a million bucks (though that might help!). You need a plan. Even if you can’t save much for retirement right now, getting a plan in place can help you stress less about retirement as it looms ever closer.

Need some specific steps to let you stress less about retirement? Try this eight-step strategy to beat retirement planning stress:

1. Know where you are and where you’re going.

Any good retirement plan starts with an understanding of where you are and where you’re going. If you’re feeling stressed about retirement, it’s time to figure out what your current savings looks like. Take some time to pull the balances and investment portfolios for all of your savings vehicles, including employer and individual plans.

Then use the tools outlined in this podcast to see if you’re on track to replace 80% of your pre-retirement income at the time you retire. By stepping through this strategy, you’ll see if you currently have enough in savings and how much you need to save each year in order to have enough to retire.

Learn More: Three Lessons You’ll Find in the 4% Rule

2. Focus on the future

If you’re like all-too-many others, step one could have a somewhat scary outcome. In fact, about 23% of American households are not on track to cover retirement expenses, according to a Fidelity survey.

In this situation, it’s easy to focus on the negative, and to just become more stressed about retirement. Then you either end up waking up at night thinking about the future, or sticking your head in the sand and ignoring the problem.

But beating yourself up about poor financial and savings choices in the past will do you no good. Instead, resolve to focus on the future. As you walk through the rest of this plan, you’ll get a better grasp on how to recover your retirement savings plan. Focus on taking steps to improve your future, rather than perseverating on the past.

3. Come up with a plan

Your retirement savings plan can start off as simple or as complicated as you’d like. If you’re feeling overwhelmed, start off with a percentage savings goal for your employer-sponsored retirement savings account. (Remember to save at least enough to take advantage of any savings matching plans your employer offers!) Or if you’re more comfortable with complex decisions, learn how to save in several types of accounts to maximize your tax benefits.

Eventually, every DIY retirement investor should learn to navigate the world of 401(k)s, IRAs, and possibly even non-tax-deductible investing vehicles. But if you’re just starting out, keep things simple.

Resource: Retirement Savings Vehicles

The key here is to plan to save a certain percentage of your income. Setting percentage-of-income goals is a simple way to get retirement savings back on track. As you meet these savings goals, you can then take time to form a more complex retirement savings plan.

4. Save early, and save often

Regardless of your age, it’s never too late to start saving for retirement. It’s never too early, either! In fact, the sooner you can start saving, the better off you’ll be and the easier it will be to meet your long-term retirement goals.

Learn Why: The Power of Compound Interest

Even if you can only afford to save a few dollars a month right now, start saving that few dollars regularly. If it helps, automatically transfer money into your retirement account with every paycheck, or even once a week. This can help you save rather than spending your few extra bucks frivolously.

What if you’re struggling under a mountain of debt? How should this change your retirement saving strategy? Your retirement savings strategy may be more nuanced. The bottom line here is that you don’t want to miss out on employer retirement savings matches. These are free money opportunities! But if you have higher-interest debts, you may want to get rid of them before you ramp up your retirement savings.

5. Learn to keep it in balance

Asset allocation may be the piece of retirement planning that stresses you out the most. But it’s necessary, and it doesn’t have to be that stressful. You don’t need to balance your assets every month, but you should set a goal to rebalance them on a regular basis.

Not sure how? Listen to this podcast to figure out how to keep your assets in balance. Rebalancing will help ensure that you keep your risk profile where you want it, and that you can reduce your risk adequately as you near your target retirement age.

6. Get comfortable with some risk

Many investors fear taking on too much risk in their retirement portfolios. This is especially true when investing in more volatile vehicles like stocks. Sure, you can lose quite a bit of money in a year. Over time, though, your investments will return bigger gains than if they’re invested in lower-risk options.

While you need to decide exactly how much risk you can handle, the bottom line is that every investment comes with at least some risk. And taking on a little more can mean bigger gains in the long run. They key is to decide how you’ll invest, and then weather the storms. Selling off completely when the market crashes is a recipe for retirement investing disaster.

So as you’re deciding on your investing plan, know how much risk you’re comfortable with, and then roll with it.

7. Reduce retirement expenses now

One of the best ways to make retirement planning less stressful is to set the bar a little lower. Sure, you want to be able to live a comfortable — or even a totally fabulous — life in your golden years. But maybe that doesn’t mean saving more money. Maybe it means working now to reduce your retirement expenses later.

The most important step here is to pay off debts, especially high-interest debts. Get and stay out of credit card debt as soon as you can, and you won’t have those payments to worry about during retirement. You might also make a goal of paying cash for future vehicles, so as to avoid car payments. And you may or may not decide to pay off your mortgage early before you retire.

Another, less obvious way to potentially avoid future retirement expenses is to take care of your health. Healthcare costs could eat up a big portion of your retirement savings. And while you can’t avoid every potential problem, focusing on exercise and a healthy diet now may ward off some chronic issues, such as diabetes and high blood pressure. Plus, staying healthy will help you enjoy those years that much more.

8. Practice makes perfect

Finally, as you draw close to your retirement years, you might practice living on your estimated retirement income. Cutting back expenses early can help you save more during those last working years, which can be a boon to your retirement portfolio. Plus, learning to live with less now — and seeing how simple that can be — can help you reduce retirement-related stress.

Even if you’re a couple of decades away from retirement, learning to live more simply and cut expenses can help you save more for retirement while stressing less about your future.

Learn More: 7 Expenses That Vanish During Retirement

This eight-step plan may not completely cure your retirement-related stress. But it can help you feel less worried as you move towards your retirement savings goals.

Article comments

Adrian says:

As a retired financial planner (Australian) my one bit of retirement advice was always endevour to pay your house off in readiness for retirement. surprisingly I have seen many people carry a mortgage into retirement. As I used to say to my clients, ‘it is far better to starve to death in the comfort of your own home!’ crude I know but it made a point I think. Renting in retirement is really not an option particularly as you are aging.

Dell Spry says:

I agree. My wife and I just paid off our house within the last 30 days. I plan to retire within the next year (I am 62) and it takes a lot of pressure off me to know I will not have a mortgage in retirement,

Desi Hisab says:

The best way to safeguard yourself is to save lot of money for retirement, so that you don’t have to worry what will happen once I retire.

Ben Diman says:

I see this often: Watch your healthcare costs in retirement, because they can eat up a lot of your savings. To be honest, since the advent of the Medicare Modernization Act in 2003 and its enactment in 2005-2006 time-frame, there has never been a better time to be a Medicare recipient. Sure, we all see the headlines “Medicare will be broke in 20XX” but the reality is zero-premium Medicare Advantage plans are commonplace in every metropolitan area across the country. These plans significantly limit your Maximum Out of Pocket (healthcare spend, annually) and 99% of the time reduce your Medicare Part A, B and D deductibles and coinsurance to low copays. They’re not a panacea but are a very good evolution of the Original Medicare program which has no out of pocket limits, and high deductibles and coinsurance percentages that Medicare Advantage plans simply lower or eliminate. Debate the efficacy of these programs all you want. In the end, VERY affordable insurance coverage options exist for nearly all people on Medicare.
Ben Diman