Keeping a Midlife Crisis From Wrecking Your Retirement Plan

The midlife crisis is easy to poke fun at — especially if it’s someone else’s.

The stereotype, as portrayed in movies and on TV, is familiar: A middle-aged man has a meltdown upon turning 40 and ditches his wife for a younger woman and a sports car. Or maybe just the car.

In real life, though, a midlife crisis is rarely so obvious or dramatic, or the sole province of men. Milestones like a 40th or 50th birthday, or becoming an empty nester, can provoke uncertainty about your life and your future. And this uncertainty can influence the way you spend.

“Feelings drive behaviors,” said Nathan Astle, a financial therapist in Kansas City, Mo. If you feel dissatisfied with your life, you might buy a new wardrobe or spend on cosmetic procedures. Or if you’re seeking excitement, you might splurge on big-ticket items like travel or expensive wine.

Of course, there’s no harm in the occasional treat, especially when you budget for the expense. The trouble is, a midlife crisis can hit just as retirement is becoming more real. So if you’re going to treat yourself, you should also make sure your retirement savings and investments are on track, experts say.

When it comes to investing, time is more important than “timing,” said Ashley Agnew, a financial therapist. In other words, saving for retirement early in life matters more than entering the market when stock prices are low and exiting when they’re high.

For example, with a 6 percent return, an investment of $5,000 each year (for 40 years) will grow to more than $800,000 by the time you’re 65, Ms. Agnew said. But if you invest the same amount of money for 30 years, you’ll have $400,000.

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