The stock market has had its share of volatility over the past few months, but investors are still optimistic overall, according to a recent Wells Fargo/Gallup Investor and Retirement Optimism Index survey. In fact, investor optimism remained at a 17-year high in the first quarter of this year.

"Over the course of this bull market since the recession, there have been periods of volatility. But people seem to brush it off and stay the course, knowing it will help them in the long run in retirement. This type of investment discipline is an important part of an overall financial plan," Joe Ready, head of Wells Fargo Institutional Retirement and Trust, said in a press release.

Older man sitting at table thinking.

Image source: Getty Images.

Investors are specifically optimistic about economic growth, stock market performance, and unemployment. The survey found that 60% of investors are at least somewhat optimistic about the 12-month outlook for these three economic factors. Many of survey respondents also thought they'd be able to maintain their household income over the next year and reach their financial goals over the next five years.

But investors took a more sober outlook about their financial readiness for retirement. Only 34% said they are highly confident that they'll have enough money to maintain their current lifestyle throughout their retirment.

So why are some investors less confident about their long-term financial state? It comes down to a lack of planning.

Ignoring these will make you less confident about retirement

Investors aren't thinking about some key aspects of their retirement, like Social Security, their income withdrawal strategy, taxes, or long-term medical expenses, according to the survey.

"The act of thinking through these important drivers of retirement outcome can help inform people about their financial preparedness for retirement," Ready said in a statement.

If you find yourself in the same position as those in the survey, here are a few suggestions that should help boost your retirement confidence.

  • Decide when to take Social Security: Unfortunately, there isn't one right answer for this question because it depends on whether or not you're still working, if you're disabled, what other income sources you have, etc. Most people take their benefits at age 62, but you can find out more about how different situations affect your Social Security benefits here.
  • Plan for taxes: Taxes don't magically disappear when you retire, unfortunately. If you have a traditional IRA or 401(k) you'll likely have to pay taxes on your withdrawals. Some retirees may have their Social Security benefits taxed as well, depending on how much money they make from additional income sources. Here's a Social Security tax calculator to help you plan for how much you might have to pay the government based on your financial situation.
  • Set up a retirement withdrawal strategy: Knowing how much to take out of your retirement accounts, and when, depends on a lot of factors. But to help you get started you may want to consider what some experts at the Stanford Society of Longevity and the Society of Actuaries came up with recently. They analyzed 292 retirement strategies and released a comprehensive retirement roadmap that included withdrawing 3.5% from savings from ages 65 to 70, taking Social Security benefits at 70, and using Required Minimum Distribution tables to determine how much to take from tax-deferred retirement accounts beyond that.
  • Create a medical expenses/long-term care plan: It's no secret that healthcare costs continue to rise and these expenses will likely take a bigger portion of your retirement savings as you get older. A recent RBC Wealth Management report said that an average healthy 65-year-old couple will spend about $404,000 on medical expenses in retirement. But that doesn't include long-term care in nursing homes, which can cost between $4,000 and $8,000 per month. There are guides available to help you get started creating a long-term care strategy for your retirement.

Remember this

Retirement planning can be difficult and confusing, so focus on each of the topics above separately so you don't get overwhelmed. The worst mistake you can make is to avoid planning for your retirement and just hope it'll all work out. Instead, tackle each of the topics individually and seek out help from financial experts to map out your plan. The more you know about when to take your Social Security benefits, potential tax liabilities, when to make withdrawals, and planning for medical expenses, the more confident you'll be as you head into retirement.