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Coping With Retirement Uncertainty

Question: The economy is getting worse day by day. I’m afraid I will never be able to stop working. How can I deal with all this uncertainty when I’m only a year away from retirement? -Marilyn, New York

Answer: Marilyn, I have never had a crystal ball and I know I cannot predict with any certainty what will happen in the future. If you listen to all the market pundits on TV they are finally starting to recognize and admit that they cannot predict what is going to happen either. The reality is, they never could predict the future and they never will be able to predict the future. They can’t, I can’t and you can’t! So stop trying to!!

People who are retiring or already retired want certainty. Certainty they’ll be okay. Certainty they won’t outlive their money. Certainty they’ll live happily ever after. But I can’t guarantee squat and neither can you. I know it’s kind of harsh but:

Ø Do you ever really know what return you’ll earn on your money in the future?

Ø Do you ever really know what the inflation rate will be in the future?

Ø Do you ever really know what the tax rates will be in the future?

Ø Do you really ever know if you’ll be downsized or let go by your employer?

Ø Do you really ever know what the government will do with Social Security?

To cope, you must first start by acknowledging that the only certainty is uncertainty. Once you have accepted this you can begin to control what you can control. Retirement success is achieved when you eliminate your debt, live below your means, watch your spending, manage your money prudently, downsize, and enjoy activities with family, friends and loved ones!

Bill’s Bottom Line: Control what you can control. Everything else is a crap shoot.

Bill Losey, CFP®, CSA, America's Retirement Strategist®, is the resident retirement planning expert on CNBC’s “On the Money”. He has been named one of America’s Top Financial Planners and is the author of Retire in a Weekend! The Baby Boomer’s Guide to Making Work Optional. He also publishes Retirement Intelligence, a free weekly award-winning newsletter. Bill can be reached online at www.MyRetirementSuccess.com.