Vanguard strategist says retirees need 'a complete mind shift' — and shares 4 principles to ease financial anxiety

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From travelling the world to embracing a second act to simply hitting the hammock in your own backyard, everyone has a different retirement fantasy.

But for many, once they've walked away from work, that fantasy gives way to the anxiety-riddled reality of living the rest of their lives without a steady income.

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"Moving from a saving mindset to a spending mindset is really difficult for most people," Garrett Harbron, Head of Advised Wealth Management Strategies at Vanguard, told Moneywise. After decades of diligent saving, he added, watching that bank account balance drop instead of rise can be stress-inducing.

And retirement income anxiety begins long before that final work whistle blows. An April Gallup poll found that 62% of Americans stress that they haven't accumulated enough retirement savings, while 54% worry about maintaining their lifestyle (1).

"This causes some retirees to spend less than they can actually afford in retirement and maybe not live the life they'd really like to," he added. "That's why starting with purpose is so important."

As such, Harbron, who noted the shift in focus requires "a complete mind shift" in an interview with CBS (2), helped outline some strategies for doing just that as the lead researcher for Vanguard's Principles for Retirement Income (3), which offers four key principles for mindful money management — and subsequent stress relief.

The four principles for retirement financial security

From dynamic spending to adhering to the 4% rule, everyone has a different take on how to handle retirement income.

Harbron said Vanguard's four principles "ensure that retirees know what they want their retirement to be, how they will spend their money, have security knowing that their money will last and the time to enjoy their retirement."

Harbron said this first step is "about setting goals, creating a spending plan, ensuring it's sustainable and thinking about the risks that might knock your plan off track." He called it "the foundation of any successful retirement plan."