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7 Ways to Deal With Financial Anxiety Before Retirement

By U.S. News & World Report

If you started saving as soon as you got out of college, had a stable job throughout your career and lived below your means all your life, you have likely amassed more than enough to live comfortably for the rest of your life. However, many people who did everything right still feel nervous about leaving their steady paychecks to retire because they are still wondering whether they will outlive their assets. Here are some tips to overcome your retirement worries:

Understand that it’s normal to feel the jitters. Fearing the unknown is perfectly normal. A nine-to-five job has been your identity for much of your life, and it’s OK to feel awkward when you are giving that up. In fact, it may take some people a bit of time to adjust to the post-work routine, even if retirement is awesome. The good news is that retirement surprises can be positive as well as negative. Perhaps retirement will be even better than you think it could be.

Re-run the numbers. Knowing the numbers make sense on paper doesn’t squash all worries, but seeing how your careful planning will help you for the rest of your life does help. You can do the financial calculation several different ways and plug in a few worst-case scenarios to reassure yourself that your finances will weather sudden shocks. It could also be worth it to have an expert review your financial projections if it helps you to sleep better at night.

You can always become more conservative if you need to. Diligent financial planners have probably already shifted some of their nest egg into more conservative investments in the years leading up to retirement. If you plan to withdraw 4 percent of your initial retirement balance annually, your portfolio has an extremely good chance of lasting the rest of your life. However, if you shift to a 3 percent withdrawal rate, it will give you even more security. You can also withdraw less in years when your investments perform poorly to help them recover faster.

Try to diversify your income streams. Your finances will be more secure if you don’t have to rely solely on your stock and bond portfolio. You could get a part-time job, make money from your hobbies, annuitize part of your wealth or sign up for Social Security payments. Making even a little bit of money from another source can help ease your worries about running out of money.

Find something else to occupy your time. Our mind works in mysterious ways sometimes. You’d think that the more we think about a problem, the better our solution will be. But sometimes the more we think about our assets, the more we are tempted to tinker, which often triggers unnecessary taxes and fees. In retirement, try to spend less time worrying about your finances and start enjoying the fruits of your labor.

Get to know more people who are retired. Most people who are retired are doing OK. Not everybody can afford to spend a lot of money, but they have time to spend how they like to. Whether or not you are happy has little to do with how much you are able to accumulate beyond a basic standard of living. Don’t let your emotions overrule your logical calculations that you are likely to have enough money for your retirement expenses or dampen the potential to have fun in retirement.

Eliminate as many recurring payments as you can. With interest rates so low, many people are taking out large mortgages in hopes of earning a higher return elsewhere. But for retirees, theoretical outcomes are pointless if it means losing sleep over the possibility of failure. In fact, it’s probably not worth the anxiety even if investing the money you borrow is guaranteed to win out financially. By reducing your cash flow needs, you will need to take less from your portfolio and it will help ease the worry of withdrawing money from your savings too quickly.

David Ning is the founder of MoneyNing.com .

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7 Ways to Deal With Financial Anxiety Before Retirement originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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