Running out of money is the number one concern among people planning for retirement. That’s according to a new survey of CPA financial planners conducted by the American Institute of CPAs (AICPA). They said 30 percent of their clients are worried about going broke in retirement. The second highest concern, cited by 28 percent of CPA financial planner clients, was similar: Not being able to maintain their current lifestyle or spending levels.

These findings actually represent an improvement over the AICPA’s last survey, which was conducted in 2016 and found that 41 percent of clients were worried about running out of money in retirement. Michael Landsberg, a member of the AICPA Personal Financial Planning Executive Committee, attributed clients’ increased confidence to the stock market’s positive performance.

“There’s been a relatively steady increase in asset values over the last few years,” he said. “This, in turn, has led to stronger client balance sheets and presumably increased confidence that their money will continue working for them well into retirement.”

A few take-aways.

Are you worrying needlessly? One of the AICPA’s more noteworthy findings was that many of the CPAs surveyed are less concerned about their clients’ retirement preparedness than their clients. Is this because the CPAs have less at stake (it isn’t their retirement, after all)? Or is it that their clients aren’t as informed about their actual situation? Or could it be that some are simply prone to worry? The spiritual component of preparing for retirement should not be undervalued. The God of the universe invites us to cast our cares on him (1 Peter 5:7). And, there is a very real evil force in the world that surely delights in robbing believers of their peace and joy. Prayer and meditating on the truth of God’s Word are integral parts of the retirement planning process.

Choose your retirement age carefully. As we point out at the beginning of our new Multiply study, any time we talk about retirement “our intent is not to support the cultural idea of retirement as an extended time of leisure.” Our intent is simply to acknowledge “that as you get older, your ability to earn income may decrease, so it’s good stewardship to prepare financially for such a time.” To that point, a growing number of today’s workers say they plan to work past the traditional retirement age of 65, which may turn out to be unrealistic.

A recent survey found that of the 21% of people who planned to work to age 66 or later, more than half failed to reach this target.” In many cases, the retiree's health, the health of a loved one, or a downsizing led to the earlier than planned retirement. Taking a conservative, confidence-instilling approach to planning would suggest planning financially to retire earlier than you may want or intend to.

Consider using the “bucket strategy.” As Joseph outlined in a March 2018 article, Bucket Challenge: Managing Cash Flow in Retirement, this is a strategy intended to give retirees greater financial peace of mind by helping them manage “sequence of returns risk” — the potentially ruinous possibility of a steep market decline right as someone begins retirement.

Here’s the essence of how to follow the bucket strategy. First, estimate an annual spending budget. Next, see how much of that amount likely will be provided by “guaranteed” income sources, such as Social Security, a traditional pension, or perhaps an annuity. Then figure out the gap — the amount of your spending budget that wouldn’t be covered by guaranteed income sources. Multiply that amount by two or three and begin retirement with that much money in a safe place, such as a money market mutual fund. (Some bucket strategy advocates recommend putting five years’ worth of living expenses in the cash bucket.)

Assuming you also have money in an investment account, such as an IRA, when the market is in decline, you would draw living expenses from your cash bucket. When the market is growing, you would draw living expenses from your investment account while also using that account to replenish your cash bucket.

Some financial analysts argue against the bucket strategy, pointing out that the portion of a retiree’s portfolio that sits in a low-interest cash bucket represents a significant missed opportunity to capitalize on market gains. But the point of the bucket strategy isn’t to optimize investment gains. It’s to optimize peace of mind. And during retirement, financial peace of mind will likely be worth more.

What steps are you taking to build peace of mind into your retirement plan?