When you realize you might soon be facing an uncomfortable situation, do you tend to "ignore" it, in hopes that things will naturally work out?
As long as you don't think about it, your worries aren't fully realized - you can imagine that things aren't as bad as you fear, or, maybe it will sort itself out and you won't have to address it at all.
If so, you might suffer from "The Ostrich Effect."
In the short-term, procrastination & avoidance may lower your stress and anxiety, If you don't HAVE to address the situation immediately, you can enjoy the rest of your day... that other stuff sounds like a problem for FUTURE you.
But long-term, this tactic can lead to a loss of control. Usually, when we feel most like avoiding our responsibilities, it's when we most NEED to take responsibility. This is particularly true when it comes to financial planning and retirement planning.
::I'm not the only one who can relate to this, right?::
The "Ostrich effect", as its known in behavioral economics, refers to the psychological tendency to avoid negative financial information by simply ignoring it (referring to how an ostrich sticks its head in the sand when it senses danger, thinking that this will prevent it from getting hurt*).
And while this behavior is understandable, it isn't exactly IDEAL for your present and your future self.
It's very easy to become detached from your retirement accounts. As you invest in those accounts over your working years, you might stop thinking of it as "your money" and start thinking about it as "your future."
But what happens when THEN becomes NOW?
If thinking about your retirement planning process fills you with a feeling of anxiety, you might try to avoid it altogether.
You don't want to discover that you haven't saved enough to retire when you are already considering retiring - But in reality, if that's going to be the situation, you need to know NOW, so you can start making modifications. There are always things you can do to help secure a better future, even if you can't change the situation today.
Then again, if you are suffering from the Ostrich Effect, that's easier said than done.
From Psychology Today:
"One of the issues with us ostriches is that when we estimate the cost vs. the benefit of dealing with it immediately, we get those estimates all wrong. We overestimate the cost and underestimate the benefits, so in our mental calculation, procrastination wins out."
::Oof - its like the people at Psychology Today KNOW me::
If ostriches tend of avoid the uncomfortable, the only way things change is when inaction becomes MORE uncomfortable than taking action. So, how do we make doing that "something" more comfortable?
With facts and data.
Again, from Psychology Today:
"Combatting misjudgment with real data can help. For example, I hate unloading the dishwasher. I used to avoid it, and then one day, I decided to time how long it actually took me to do it. The result? Less than three minutes. Now, every time I notice myself putting it off, I tell myself, “Three minutes,” and it usually does the trick.."
So, the idea that working with a professional to address your retirement concerns is thought of as "too much work" because the benefit is knowing whether or not you'll have enough money in retirement to live the lifestyle you want. And if thats the only benefit, maybe a little luck and fortunate circumstances will get you through retirement without having to talk to someone, and that is OK with you.
However, the uncomfortableness of addressing your current financial situation can quickly overshadow the thought of "I can't wait to do {x, y, and z} in retirement!". If you don't know the numbers needed to retire and live the lifestyle that you want, you can never truly know if you'll be able to achieve that goal. And that's where the true "cost" comes in, WHAT ARE THOSE NUMBERS FOR YOU AND HOW LONG WILL IT TAKE TO FIGURE THAT OUT?!?
It can be overwhelming to think of the entirety of life in retirement (which, in turn, can cause more procrastination). But by breaking a project in to actionable steps, you can chip away at it bit by bit and accomplish your goal without that overwhelming sensation of panic and/or anxiety. I can't remember where I heard the phrase, but someone once joked with me "How do you eat an elephant? ... One bite at a time!"
Start small, and start with information you know you can answer today. If you haven't done so yet, take a moment and grab our monthly budget worksheet and fill it out.
It might take you five minutes, it might take you fifteen minutes, and maybe you don't have EVERY single expense in front of you at this moment, but you'll now have a much better idea of what you'll need every month for essential and lifestyle expenses. Now you can start to extrapolate that out and get an idea of what you'll need per year in retirement.
On the flipside, its important to understand what avoidance TRULY costs; if you're avoiding that conversation about your retirement finances because it makes you "uncomfortable", but you retire and THEN realize you're going to be shy of the monthly income you need? Well, now you either have to re-enter the workforce, find a way to make your current accounts earn a higher interest than you're comfortable with, or make some changes to your intended retirement lifestyle, all because you didn't want to have what you thought might be an awkward conversation.
There may be a few different factors relating to your ostrich-like behavior; maybe you are unsatisfied with the growth in your retirement account over the past few years, maybe you were in higher-risk positions than you needed to be, or maybe you're simply unsure of how mentally prepared you are for retirement. Either way, you can't go into the past and change things.
But your retirement planning situation IS something you can take control of NOW. With professional help, you'll get the support you need to avoid being an ostrich — because someone else will also be looking at your situation.
The more you take control over your situation, and the more you educate yourself, the less fear you will feel — even if your situation is still the same. Talk to a retirement planning professional today.
*Fun fact - Contrary to the popular myth, ostriches do not bury their heads in the sand! When an ostrich senses danger and cannot run away, it flops to the ground and remains still, with its head and neck flat on the ground in front of it. Because the head and neck are lightly colored, they blend in with the color of the soil. Thanks to the San Diego Zoo for the info!
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