Retirement can be a relaxing and satisfying stage of life, though it does come with challenges. Facing them can provoke anxiety, even if you’ve been planning and saving for years.
Paying for Health Care
Americans are most concerned about financing health care costs in retirement. According to the survey, 28 percent of people are worried their medical expenses will be too high. Fidelity estimates that a healthy, 65-year-old couple retiring in 2017 will spend $275,000 on health care costs. For most Americans, that could easily disrupt any retirement budget plan.
What to do about it: Incorporate anticipated health care costs into your retirement savings plan.
Saving Enough Money
Today, nearly 25 percent of all 65-year-olds will live to age 90, according to the Social Security Administration. Almost as many worry that they will outlive their money, according to the Bankrate survey.
What to do about it: You can alleviate some anxiety surrounding retirement by estimating how much you need to save to cover a long retirement. Start by looking at your current expenses and living standards, and use that as your baseline. Then consider how you expect your standard of living to change in retirement, if at all. Once you have an estimate of how much total savings you’ll need for retirement, you can start constructing a savings schedule.
Maintaining an Income Stream
According to the Bankrate survey, 18 percent of Americans are worried they won’t be able to afford day-to-day expenses in retirement. They aren’t confident that Social Security income will be enough to cover some expenses, or that it will even be still exist.
What to do about it: While planning for retirement, keep in mind that working for even just a few more years or working part-time in retirement may help postpone drawing income from Social Security and savings while taking advantage of available pensions and benefits.
Having too Much Debt
Seventeen percent of U.S. adults are concerned they won’t be able to make minimum payments on credit cards in retirement. According to data in the 2017 New York Fed Consumer Credit Panel, the average 67-year-old in 2015 had 169 percent more debt than in 2003. Debt increased by roughly 60 percent for all borrowers between 50 and 80 years old.
What to do about it: While debt can easily feel overwhelming, there are a multitude of strategies to paying it off. Try the Snowball Method or the High Rate Method, and don’t forget to create a budget that includes debt payments if you haven’t already!
Putting time toward planning for retirement now will have big rewards later on down the road. It all starts when you make a commitment to yourself to save!