Stressed About Retirement? Here Are 3 Expert-Backed Steps To Try Now

If just thinking about retirement makes you nervous, it’s time to rip off the band-aid and face your finances. By taking the time to think about retirement today, you can feel a lot better about the future.

“Preparing for retirement can feel overwhelming, but taking a few concrete steps today can go a long way toward easing anxiety and building confidence in your financial future,” said Luke Harder, a certified financial planner (CFP) at Claro Advisors.

Here are three steps you can take right now to secure your retirement.

1. Establish a Retirement Cash Cushion

Building up some cash savings can help to ease retirement worries because it can help mitigate what’s known as sequence of returns risk—or the risk that a retiree has to take withdrawals during a down market early in retirement.

With sequence of returns risk, a retiree may have to sell more of their investments in a bear market to generate retirement income, resulting in a smaller nest egg in the long run.

“Set aside two to four years’ worth of essential living expenses in stable, low-volatility assets such as money market funds, CDs, and short-term bonds,” says Todd Calamita, a CFP at and founder of Calamita Wealth Management. “This buffer lets you cover spending needs without having to sell investments in a down market. From a psychological standpoint, this has helped my clients stay calm even in down markets.”

2. Increase Your 401(k) Contributions

If your company has a 401(k) plan, now is the time to make the most of it.

For example, if your employer offers a 3% match, make sure to contribute enough to qualify for it. By contributing 3%, you would be putting away a total of 6% of your salary towards retirement.

“Be sure to take full advantage of any employer match, which is essentially free money toward your future,” Harder said.

And if you’re already contributing enough to earn the match, consider incrementally boosting your contribution rate over time.

“Even small percentage increases can have a significant impact over time thanks to compounding. By gradually boosting your contributions, say by 1% per year, you can strengthen your retirement savings without dramatically changing your lifestyle,” Harder said.

3. Test Drive Your New Budget Before Retirement

Depending on whether you have enough money saved up to maintain your current lifestyle, you might have to adjust to a different standard of living in retirement.

If you believe you might have a lower standard of living in your later years, try temporarily implementing this budget to get an idea of whether it’s sustainable.

“Most of the time, being nervous comes from feeling behind in your retirement savings. If you think you’ll have lower household income, try it out before retiring,” says Robert Persichitte, a CFP at Delagify Financial. “Set a new budget and try to live with it. If you are miserable, you can adjust your retirement age or consider other options.”

The Bottom Line

Saving for retirement can feel daunting, but it doesn’t have to.

By taking a few small steps now, you can set yourself up for a financially secure future: take advantage of your 401(k) and boost your contributions over time, test drive your retirement spending plan beforehand, and build up a cash cushion you can tap during retirement.

You don’t have to do all of this in one day, but take the time to complete these steps over the next few weeks or months.