How Anxiety And Depression Can Drain Your Retirement Savings

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Psychological distress can impact more than just health—it can also be a major hit to your nest egg, according to a new study published in Health Economics.

Cornell University financial economists found that people with anxiety and depression are nearly 25% less likely to have any retirement savings. For those that do have a retirement account, they may act in ways that limit its growth, according to study co-author Vicki Bogan, a Cornell associate professor.

For example, people with self-reported mental health challenges are more cautious when it comes to risk, but also less likely to seek financial planning help, Bogan says. This can create difficulties later in life, especially when additional factors come into play.

“People are living longer, dealing with more psychological distress, and often shouldering the burden of saving for retirement without the help of employers,” she notes. “That all adds up, especially for those with anxiety and depression, who may not be thinking about their financial health.”

Bogan suggests getting a financial check-up from a professional, and most of all, to see financial wellbeing as part of overall good mental health.

In addition to financial planning, it’s also beneficial to spend some time addressing your sense of resilience, and putting strategies in place that could serve you well as you age, according to Scott Dehorty, LCSW-C, a social worker at Delphi Behavioral Health.

For example, he notes, depression doesn’t always manifest as sadness. Instead, you might have increased anxiety, lack of enjoyment in activities you once loved, ongoing fatigue, and even a heightened sense of pain.

“Many people with depression or anxiety actually feel things differently in their bodies,” says Dehorty. “Aches and pains bother them more, because the brain doesn’t filter out pain signals as well as it would normally.”

Signs like these are often early indicators that it’s time to amp up the self-care, he adds. That might mean seeing a therapist, as well as implementing de-stress strategies like mindfulness or better time management. (Here’s exactly how mindfulness helps your mind and body—and how to do it, according to Prevention Premium.)

“The best thing to know about depression and anxiety is that they are very treatable,” Dehorty says. “There’s no reason to feel helpless or hopeless, there are many ways to get back to feeling good.”

Bringing together financial health and mental health now could help alleviate many concerns about future wellbeing, Bogan adds.