Between raising families, navigating careers, and exploring the world, life simply gets busy. For many Americans, responsibilities take us over, external pressures occupy us, and priorities get the best of us. Before we know it, suddenly we’re in our 60s with decades worth of experiences under our belt.
While that is the reality for most people, the truth is, this type of pattern is what gets pre-retirees in trouble when it comes to finances. With the mentality to live fully, this is a dangerous habit that fiduciary experts would call “financial avoidance.”
The term financial avoidance is simple. It is the idea that a person ignores their financial situation to escape the stress and anxiety about money. Oftentimes, this behavior involves neglecting to check balances, pay bills, or save wisely. At first, finances feel like something you will get around to once life slows down. But eventually, those delays quietly add up.
“Most people don’t end up at 60 with nothing saved because they were careless, it’s because life kept happening while they weren’t paying attention. Marriage, kids, car loans, mortgages, the years slip by and financial consciousness never arrives,” Michael Scarpati, CEO of RetireUS, said.
According to CNBC, nearly all Americans are worried about their finances in some way. It reports about 77% of people feel anxious about their financial situation, while 52% have difficulty controlling their money-related fears. Additionally, roughly 68% of people are scared about not having enough money to retire.
Those numbers prove exactly why financial avoidance is so dangerous. People become occupied with building a life, but somewhere along the way, planning for the future slips through the cracks. And the longer someone goes without addressing it, the less time they have to recover.
Scarpati adds, “Our culture tells us to chase lifestyle first and think about retirement later, but later comes faster than anyone expects. It’s a mindset trap: treating retirement as something you’ll ‘get around to’ instead of something that is a priority each year. This is where bringing in external support for accountability and execution can make a major difference.”
What Scaparti would argue is that retirement planning cannot wait any longer. That is, it shouldn’t depend on when the timing is convenient. In order to build financial stability, preparation must start early.
The good news is that reversing financial avoidance can start small. For instance, one of the most immediate shifts an individual can make is awareness. That includes acknowledging account balances, reviewing current spending patterns, and understanding where the money is coming and going. Financial awareness alone is the first major step in strengthening your future.
Secondly, pre-retirees can begin with tangible actions where they can actually see the difference. Perhaps, that could look like putting all of your bills into a monthly calendar, or using money-saving apps that show your current financial status. The key here is to utilize something that is visual so that it keeps you organized and ideally makes the process more appealing.
Finally, individuals can leverage other resources to help keep them on track. A fiduciary advisor or a financial program helps people set sustainable goals and pivot more realistically. The more professional support, the more clarity that comes with it.
Alternatively, continuing to delay has real consequences. Without proper planning, people often reach their retirement years only to realize they must work longer than expected, drastically change their lifestyles, or depend on others for financial support. Much worse, delays make people more susceptible to unforeseen events, where there are less options and less flexibility later in life.
For the most part, retirement planning is not easy. It requires strategy and intention in order for results to make a meaningful impact. But for those who can overcome financial avoidance, rest assured you will find yourself in a better peace of mind.
At the root of it all, we know life gets crazy, and we know it requires our presence. But at the same time, retirement planning also demands our attention. So let’s not waste any more time to regain control today.