There's a lot to worry about in your golden years — but it doesn't have to be that way.
• July 15, 2022 •
After decades of hustle and bustle, working and parenting, saving and investing, folks want to chill out and enjoy their fourth quarter of life.
Unfortunately, it doesn’t always work out that way.
Humans tend to worry, and the golden years can be fraught with fright. Will your assets hold up? Will your health?
As part of its recent Retiree Reflections Survey, the Employee Benefit Research Institute asked more than 1,100 American retirees, “What financial worries keep you awake now that you are retired?” All respondents were between the ages of 55 and 80 and had at least $50,000 in financial assets.
Read on for a look at the top worries.
10. Housing costs
Retirees who cited this worry: 12%
Aside from mortgage payments, homeownership costs can include a myriad of other expenses to keep a roof over your head — repairs, maintenance, property taxes, homeowner association dues, utilities and insurance. A leaky roof, broken drain or termite problem, for example, could cost thousands of dollars to fix.
9. Whether I’ll be able to leave an inheritance
Retirees who cited this worry: 13%
It sounds like a no-brainer — you want to pass on some of your hard-earned money to your kids and other family members, and how much you are able to varies widely depending on wealth, age of death and education level.
But it’s not necessarily that simple. You have to make sure you have enough money for yourself and your spouse. Unexpected illness and exorbitant health care costs such as nursing home care and other types of long-term care can destroy your savings. Then there is the rising cost of everything.
8. Ensuring my spouse is financially secure if I die
Retirees who cited this worry: 15%
Too often, couples don’t plan their retirement years, and that lack of planning can lead to a sense of dread about what will happen to the surviving spouse if a breadwinner dies before their time.
But don’t wait until it’s too late.
7. Day-to-day expenses
Retirees who cited this worry: 19%
Aside from the biggies like health care, insurance and housing, it’s the everyday costs that can literally nickel-and-dime your retirement savings to death.
Regular gas prices, for example, increased by $1.51 per gallon between July 2021 and this July. And there are plenty of other costs that keep your debit cards busy — groceries, eating out, gift giving, subscriptions.
6. Unexpected non-medical emergency expenses
Retirees who cited this worry: 28%
The car transmission’s done, your beloved pet needs surgery, the water heater has imploded. Stuff like this happens, and it’s not a matter of if but when!
5. Market volatility (tie)
Retirees who cited this worry: 33%
The stock market’s amazing bull run became a topsy-turvy ride in 2022.
In times like these, it’s tempting to fear your portfolio shriveling during your retirement. But it’s imperative not to make financial decisions out of fear.
4. Running out of money (tie)
Retirees who cited this worry: 33%
It’s a huge fear, right? You’ve stopped working, and you’re looking at possibly two to three more decades — or longer — of having to pay for stuff.
The Employee Benefit Research Institute estimated in 2019 that only 59.4% of U.S. households headed by someone age 35 to 64 would avoid running short of money during retirement.
But retirees need not fear but instead should take action. We detail how to tighten up the budget. There’s also the idea of bringing back some cash flow. Retirees can get a side hustle, part-time job or passive investment.
3. Emergency medical expenses
Retirees who cited this worry: 34%
A cardiac incident, stroke or broken bone can put retirees in the emergency room, and it’s not easy on the pocketbook. A visit to the ER can set you back hundreds of dollars, on average, with costs being highest for people age 65 and older.
2. Preventive health care costs and long-term care
Retirees who cited this worry: 36%
The Rolling Stones sang, “What a drag it is getting old,” and that’s true for retirees unprepared for possibly years’ worth of long-term care.
According to Genworth Financial, costs can range form $1,690 per month for adult day health care to $9,034 per month for a private nursing home room.
Long-term care insurance can alleviate those expenses.
Even aside from long-term care, retirees will still feel the pinch of health care costs. Fidelity Investments estimates that a couple, both age 65, who retire in 2022 can expect to pay more than $300,000 in medical costs during retirement, on average.
1. Inflation
Retirees who cited this worry: 54%
According to the federal Bureau of Labor Statistics, prices increased by 9.1% between June 2021 and this June.
That means you’re paying $9 more per $100 of expenses. That could mean spending hundreds if not thousands of dollars more each year if inflation stays high or even goes higher.
