4 Money Matters That May Keep You Up at Night

Career stress. Parenting stress. That old fear that you’ve missed the entire semester of class and the final is today. According to survey after survey, including last year’s Gallup Economy and Personal Finance poll, all of these are dwarfed by financial concerns. These are the big four:

• Will I have enough money to retire?

• Will healthcare costs in retirement eat away at my savings?

• Will I be able to maintain my standard of living when I retire?

• Will my kids’ education costs cripple me?

Let’s look briefly at each one and suggest a reason to sleep easier.

Will I have enough money to retire?

This is the biggest concern, by a mile, for most people in any career. Physicians, though generally considered “highly compensated,” are not immune to this fear. If you’re not currently saving for retirement, this fear may be entirely justified.

Sleep easier: Save and invest, whatever and whenever you can. Maximize your 401(k) or 403(b) plan, if your employer offers one. If not, establish an IRA and contribute as much as you can to it. There are a million investment strategies and vehicles at your disposal, but they’re all moot if you don’t pay your future self as you do all your other current expenses. If you’re behind, don’t think about lost years or opportunities; start now. And if you can’t max out your investment vehicles, that’s OK, too. Pay yourself what you can.

Will healthcare costs in retirement eat most of my savings?

No matter your family health history or current health, you know better than anyone that good health can be fleeting. And you know that a downward trend in healthcare costs is unlikely in our lifetime.

Sleep easier: You can take steps now to prepare for any eventualities you may face in the future. Start here, and then look into a Health Savings Account and long-term care insurance. No one can prepare for every possible retirement scenario, so pick a couple that are more likely than others to impact your planning. Health savings is a great place to start.

Will I be able to maintain my standard of living when I retire?

This fear is slightly different than the top one listed above, but it is certainly tied into how much you’re investing, what you plan to do when you retire, and how diversified those investments are. While some costs may go up when you retire, many are likely to go down. Estimates show that you should plan to replace about 80% of your income for when you retire, but the actual amount will differ depending on your personal situation.

Sleep easier: Many retirement providers and financial institutions have retirement savings calculators that let you plug in your personal circumstances and figure out how much income you’ll need to retire in something approaching then same lifestyle you have now. These calculator are no guarantee, but they will help you gauge your current savings strategy and potentially increase it while you’re still earning.

Will my kids’ education costs cripple me?

You’re right to be concerned. The costs of secondary education seem determined to keep pace with healthcare. But you don’t have to lose sleep over it.

Sleep easier: Read this, which summarizes the advantages of 529 College Savings Plans. 529s are just one of many types of plans designed to help you save for education expenses. As with all savings vehicles, time can work in your favor even if you don’t have a lot to contribute right now. The longer your time window before the money is needed, the longer you’ll be able to earn compound interest enhanced by federal tax-free growth potential. This is because any earnings in 529 plans are automatically reinvested in the plan.

So much of what drives stress is fear of the unknown. Taking action to address those fears is the best way to take away their power. If starting those preparations today is later than you planned, it’s still better than starting tomorrow, next week, or next year.