As they approach the retirement age, most Americans and other people throughout the world begin to develop particular concerns about their retirement. People are worried about whether they have set aside the finances needed to lead a comfortable post-retirement life. Despite having high standards of living, Americans have retirement concerns that haunt them.
What are the retirement concerns that haunt most Americans?
“I’m retired — goodbye tension, hello pension!” —Author Unknown
Concerns about Paying For Healthcare
The cost of healthcare is among the top concerns that haunt a major portion of Americans. According to research, 28% of Americans are worried that they will be required to spend too much for healthcare.
However, only about 15% of Americans who are close to retirement have a clue about the kind of expenditure on post- retirement health care. Unestimated healthcare cost can derail retirement plans, leaving people with many problems.
Lack of Savings is Also Retirement Concerns Hunting Most Americans
Americans are spending money without pay attention to the savings they need to set aside. Therefore, as they approach retirement, anxiety sets in. It is important to start estimating how much they need to save to cover an extended retirement. You should boost your savings by taking advantage of the catch-up contributions to your retirement account and adjust the asset allocations to meet any changing circumstances.
Around 10% of all Americans worry about having too many debts during retirement. The median 65-year-old Americas had more than $48,000 in debt in 2015. This was an increase from $34, 000 in 2003. 80-year-olds of all borrowers witnessed their debt increasing by 60% during the same period. The rising cost of living along and the increase in debts are a major concern among Americans.
Social Security Benefits
Most Americans heavily rely on Social Security. However, they still have some doubts on whether they can depend on the system, specifically when it is time for them to retire. This is a recent phenomenon that relates to more retiring Americans than those entering the workforce. The Social Security collects the funds by taxing the workers, and the money is used for paying the beneficiaries. With the current trend, it is quite possible that the government may not be in a position to collect the required funds. Beneficiaries could also see a reduction in the amount disbursed to them.
Earlier, funds were paid to Social Security, but the payments were not substantial. The excess funds were used to set up a trust fund. People believed that the taxes collected could not support the benefits, which prompted the setting up of a trust fund as a backup. As of now, it is expected that by 2019 the Social Security will need to withdraw money from the trust fund for payments until 2034 before the fund runs out of money. These figures will certainly cause some retirement concerns among Americans who rely heavily on Social Security.
How Can The Retirement Concerns Hunting Most Americans Be Managed Effectively?
Retirement concerns that haunt Americans can be appropriately managed if people begin to plan for unexpected contingencies in advance. There is need to adopt lifestyle changes in their lifestyles. That way, it will be easier to manage one’s post-retirement life.
Moreover, despite being a harsh measure, one must no longer rely heavily on Social Security, especially since there has been a reduction in the collection of taxes.
The cost of healthcare is not likely to reduce. In all probabilities, it will increase regularly. As an American, you must consider making investments in healthcare plans separately without depending on the government-offered handouts. Also, make an effort to begin planning for retirement right away. In all other cases, you must be prepared to brave it out when you retire.