Very simplistically, the term “neurosis” relates to an inability to adjust aspects of behavior to one’s current reality. In my practice I use the term “financial neurosis” to describe current financial decisions that are mired in the lifestyle of a prior stage of life. The devastating downside to financial neurosis is when one’s anticipated financial circumstances declines, without a planned corresponding restructuring of expenses and lifestyle. Long-believed adages aside, one's retirement lifestyle generally is at least as expensive as that of pre-retirement. Here’s my advice: Spend time calculating your current cash outflows, lifestyle changes during retirement, and add a hefty cushion for the unanticipated.

Source: Forbes February 21, 2017 20:37 UTC