Posted by Tim Stobbs on October 12, 2011
In retirement planning perhaps one of the most common issues people come up against is doubt. They doubt that their plan will work, they doubt that they can actually save enough, they doubt their ability to invest or even doubt why they should save at all. If you have ever felt this way about your retirement: congratulations! You are in fact still human.
I would be seriously worried if you have never doubted yourself or your plan when it comes to retirement. You see people really aren’t hardwired to plan that far in advance so a lack of doubt to me would indicate your are either brutally over confident or your plan is seriously missing a few things.
I personally doubt my plan at least once every few months. It could be triggered by poor investment performance, or a few additional expenses that come up that I wasn’t expecting. Regardless of the reason I end up with that empty feeling in my gut and a worried expression on my face. Yet after this happening a few times I’ve learned that doubt is actually a sign to learn more.
Doubt usually exists in a situation where you feel off balance from a lack of information or confidence in the information you already have. So for me I usually treat doubt as a sign to go out there and learn more about what is bothering me at the moment. So if I have unexpected expenses I will ask: why didn’t I see this coming? Do I have enough money in my plan to cover something like this in the future?
I find answering these questions and writing down my issues puts my doubts back into a reasonable context where I can make a valid decision on the risk of the event occurring again. From there I can look at the overall risk management of my plan and decide if I need to adjust anything. For example, in my last run of retirement calculations someone brought up a point that I didn’t have enough in for home maintenance, which after a little research I agreed with them and increased the amount.
Perhaps the only really bad reaction to doubt is to give up on your retirement plan and stop saving for it. This isn’t to say that you can choose to save less if you need to, but giving up entirely is dangerous. Why? Because by stopping that momentum you might never get back onto that track again. So while your foot is just fine today, you might have just blown off one of your future feet ten years down the road. The only wrong choice with your doubt is to give up entirely.
So what do you do with your doubts? Write them down, talk to someone about them, read an inspiring book or what works for you?