-How much money do you need to retire, or as I like to say, stop working for money, and not be at risk of outliving your financial resources?

-How much of your investments should be in cash, stocks and bonds? What’s a safe amount of money to withdraw each year from your investments?

-Can you afford your current lifestyle or will you need to downsize?

These questions are on the minds of 60-70 million baby boomers nearing or currently in retirement. What concerns me is the worry and fear so many of my fellow boomers are carrying around in their bodies. The stress of not knowing how you’re going to retire, if you can retire, how it all works when you do retire, is taking a serious toll on your happiness, relationships and health.

Money & Stress

This topic is on my mind due to a recent client engagement. A few months ago a couple in their late sixties contacted me for financial planning help. After working long and hard their entire lives, they had saved over a million dollars. Then, a few bad financial decisions along with a collapse of the real estate market, coupled with the stock market crash left them with a net worth of $200K.

Not that $200K is chump change - but when you are in your late 60’s, and that’s all the financial resources you have to last the rest of your life, it’s scary. They do have social security and a small pension, but many lifestyle changes, some drastic, needed to occur to make the numbers work.

I could feel the tension and stress in their lives. During our strategy meetings, they would share with me their deepest fear and concern which is that they would wind up homeless and destitute. That was not rational thinking, but when you feel like you’re sinking into quicksand, rational thought gets thrown out the window.

A couple of weeks into our work, Ben (not his real name) suffered a heart attack. Can I say directly with proof positive that stress and worry caused this otherwise healthy man to have a heart attack? Obviously not, but do I suspect that stress was the culprit.

Flying Blind

Over the years, Ben and Laurie had various financial advisors that told them where to invest their money. Yet when it came to the number crunching; how much they would need to save up for a safe retirement, how much they could expect to live on, etc, they received no guidance.

So, as with millions of other baby boomers that think they’re receiving financial advice but aren't; here’s a list of questions to ask your financial advisor as well as yourself:

• How much do I need to have in savings and investments to maintain my current lifestyle when I’m no longer working?
• Does it make sense to start collecting social security at 62 or is it better to wait to 66?
• What changes can I make now to my lifestyle, savings plan, investing plan and debt repayment plan to assure that I have the lifestyle I desire when I no longer work for money?
• Can I stay in my current home or does it make more sense to downsize when I reach retirement?
• Should I pay off my mortgage prior to retirement?
• What if I decide to early semi-retire and work part-time up until 72, instead of working full-time for the next 6,10 or 15 years, how does that scenario play out?
• What type of return on my investments should I expect when in retirement?
• What are some alternative options I have besides the work full-time until I'm 65 model?
• How much should I plan to pay for healthcare when I’m retired?
• If I want to leave x amount of inheritance to my heirs, how much does that leave me to spend during my life?

These questions are only the tip of the iceberg. My point is to show how heading towards retirement without knowing where you’re going, how you’re going to get there and not having a plan of what you’re going to do when you arrive is very risky.

I see firsthand how many people avoid this issue. Believing that all you need to do is keep working and working and saving as much as you can, is by default a plan I guess, but after working 40+ years of your life, why fly blind into your retirement? Faith and hope that all will work out is not a plan.

At the end of the day, most baby boomers will crash land into retirement. Some will make it without any worries. Others will spend the next decade worrying themselves sick about having enough money. To be honest with yourself about your doubts and fears is the first step on the road to a successful retirement. The next step is action.

Truth is power - knowledge is power. Empower yourself and make a decision today that you will not fly blind into retirement; that you will look retirement squarely in the eye and you will be fearless. You owe yourself nothing less.