Illustration by Janet Atkinson

By Kevin Ellman CFP ®

Recently, I got a call from one of my clients who lost her husband about a year ago. She was completely stressed and wound up. When I asked her what was wrong, she told me that she was working three different jobs and was miserable. “Why” I asked, “are you working three jobs?” Her response: “I’m terrified of running out of money and becoming a homeless person!”

I was a little befuddled. She (and her husband) had been my client for the last 10 years, and in our most recent meeting, a few months earlier, I had reviewed her finances and cash flow and assured her that she had more than enough money to retire on while still maintaining her lifestyle.

I asked her to tell me about her jobs. She told me that she hated two of the jobs but really loved the third one. “I work in a surf shop with a bunch of young people; it makes me feel young, and I am even learning how to surf!” I advised her to quit the two jobs she hated, and, even though she did not need the money, to keep the third job for as long as it made her happy.

My client’s fear is a perfect example of what I call “Bag Lady Syndrome,” in other words, the fear of running out of money. In fact, the most often cited cause of stress among all Americans is related to, plain and simple, money. This fear and related stress seems to take a particularly heavy toll on women, regardless of status; single, married, divorced, widowed or affluent.

Frankly, it is not an irrational or unfounded fear. Everyone should take steps to make sure they do not run out of money. Why? Because all of the retirement systems currently in place were conceived at a time when people did not live as long as they do today. When social security was created, average life expectancy was around 67. In 2013, average life expectancies are pushing into the 80s. This, coupled with the fact that women tend to outlive men, means that it is wise to plan for a much longer period of living in retirement.

So, what can you do? Plan!

Step One: Know where you stand now. If you are a do-it-yourselfer, you can go onto any one of a hundred websites for retirement planning. If not, then we believe you should work with a financial advisor who will review your goals, gather all the facts, and present you with a snapshot of your current financial position.

Step Two: Once you know where you stand today, consider your options, ask questions and plan for the future. Are your investments working hard enough? Do you need to start saving more and spending less? Do you need to consider working part time in retirement? A financial advisor should be able to help you understand all your alternatives and set realistic goals.

Step Three: Take action. Implement and follow a plan. Make the changes your advisor recommends. No matter how you plan to spend your retirement years, solidifying and sticking to a plan can make it more likely that you will be able to turn your vision into reality.

Step Four: Stop worrying about becoming a bag lady. Creating and following a well-designed financial plan can help you have confidence about your financial future.