Posted on Nov 18, 2020
The decision to retire often brings a mix of emotions: relief, excitement, and anticipation of more time to relax, travel, and pursue other interests. However, retirement is a significant life change with emotional, psychological, and financial implications. Even people who feel they’ve planned well and are ready to retire may experience some trepidation once they actually make the move.
A 2019 survey by the Transamerica Center for Retirement Studies found that top retirement fears include the following:
- Not Having Enough Money to Last through Retirement. Almost half of workers expressed fears of outliving their savings. This is not an unreasonable concern, given that Americans in general aren’t saving enough for retirement, and often underestimate what their expenses will be when they stop working. With the disappearance of pensions, many employees need to shoulder the responsibility themselves of saving enough for retirement.
- Changes to Social Security. The majority of would-be retirees worry that Social Security payments will be reduced or even eliminated by the time they retire. While trust fund reserves are projected to become exhausted by 2037, with continuing taxes expected to pay just 76 percent of scheduled benefits, Congress is likely to make necessary adjustments to keep the program running. Social security payments are currently made to 50 million people. While Social Security was never intended to be the sole source of support for people in retirement, it is a major source of income for the elderly.
- Health Concerns. In addition to fears about Alzheimer’s disease or other forms of dementia, employees worry about access to affordable healthcare and the costs of nursing home care. According to Fidelity, a 65-year old couple retiring in 2019 can expect to spend approximately $285,000 on health care and medical expenses during their retirement years. This does not include the costs of long-term care. The average annual cost for nursing home care varies across the country, but can range from $80,000 to over $100,000. People who retire before they can go on Medicare at age 65 need to factor in the expense of health insurance coverage in their retirement plans.
There are many things we can’t control in life. However, it’s important to develop the best plan possible for retirement and carefully consider your options.
This material is provided for informational purposes only, and is not intended as authoritative guidance, legal advice, or assurance of compliance with state and federal regulations.