The Greatest Financial Fears of Most Retirees
Retiring has almost always been looked forward to as the “golden years.” A time to relax and do the things you love to do after having worked hard for 30 or more years. However, in light of the 2008 real estate debacle, which devastated the retirement funds and lives of many and the uncertainty that faces the country with the new administration, retirement is no longer perceived as “golden.”
Not only do those who are nearing retirement age have worries, even the millennial group and beyond have much to think about.
I am reviewing four of the most common financial fears that retirees now must contend with.
The greatest financial fear of most people nearing retirement age is that will run out of money.
According to a recent survey conducted by Transamerica Corporation, 51% of respondents said their greatest retirement fear was outliving their savings. That was an increase from 44% in the previous year.
The second greatest fear is one that’s out of anyone’s control: Social Security cuts.
Unlike being able to decide to save more money, if possible, no one can prevent this. According to the Office of Retirement and Disability Policy, by 2035 taxes will cover only 75% of the planned benefits. A couple of solutions have been put forward. One is to raise taxes or to increase the retirement age for those born after 1960. Either way everyone will be affected.
Next is the issue of rising health costs.
When you consider that your retirement savings are meant to cover our care if we can no longer care for ourselves, this is a real concern. Long-term care insurance has jumped from a $30 billion market in 1980 to $225 billion today. And premiums always rise with increased demand.
Last but not least is the issue of forced retirement.
Apparently not as many people consider this as plays out in reality. According to Transamerica’s survey mentioned above, nearly 20 percent of people fear that they will be forced into early retirement. However the Employee Benefit Research Institute has found 46 percent of workers leave earlier than planned, due in large part to health concerns or layoffs.
All of these are well-founded financial fears. The best plan to overcome any fear is of course, starting to save for retirement as early as possible and sticking with a well thought out plan.