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Top 3 Fears Americans Have About Retirement – and How to Combat Them


While many Americans idealize retirement as sitting on the beach and traveling with loved ones, the crushing reality is that many people cannot afford that life in retirement. A recent survey from the TransAmerica Institute gathered data on the top fears that Americans have about retirement. You may find that some of them are the same things that worry you when thinking about the future. A financial advisor could help you get peace of mind by creating a financial plan for your retirement needs and goals. Here are three common retirement fears that the study revealed and how to allay an anxiety with practical steps.

Retirement Fear #1: Outliving Savings and Investments

Advances in medical technology have resulted in people living longer than ever, and many of today’s workers are likely expecting to live well into their 80s or even longer. While that is in most ways a wonderful thing, it does mean you have more non-working years to fund, and 42% of all workers fear that their investments and savings won’t last their entire lives, according to the TransAmerica Institute.

There are a few things you can do about this. The most obvious is to up the amount you are saving and investing now. If you currently contribute 5% of each paycheck to a 401(k) or other workplace savings account, consider upping that to 7%, if your budget can afford it.

Another way to alleviate this fear is to purchase a lifetime annuity product which guarantees income in retirement. Annuities can be complicated, so consider working with a financial advisor to find the best option for you. Regardless of what annuity you choose, though, it will give you some comfort in that even if you start running low on money from other sources, you’ll still be getting periodic payments.

Retirement Fear #2: Long-term Care Costs

SmartAsset: Top 3 Fears Americans Have About Retirement

Getting old can mean needing help with living — whether that means living in a nursing home, having a full-time in-home caregiver or simply having someone who comes to your home to help with things like cleaning. This can be expensive, and 39% of all workers worry they’ll need long-term care, according to the TransAmerican Institute. Furthermore, 34% worry about the costs.

There are a lot of options when it comes to paying for long-term care, including state programs. If you are worried about affording long-term care, though, consider purchasing long-term care insurance. This works like any other insurance product: you’ll pay a monthly premium, and in return get a benefit to pay for long-term care expenses when you need them. Some long-term care products are packaged with a life insurance policy, so there is also a possible death benefit for your family after you die.

Retirement Fear #3: Social Security Will Reduce or End

The fear of Social Security payments massively reducing or even completely disappearing are often discussed in the media, and it has had an effect: 38% of all workers say the fear they’ll get significantly smaller Social Security payments than anticipated, or even that the program will completely disappear, according to the TransAmerica Institute.

First, a bit of a reality check: Social Security is very unlikely to die. There are certainly issues with the program, but economists and policy wonks generally agree that it will remain funded for the foreseeable future.

That said, Social Security is not a program that most people can expect to live off of. Make sure you’re saving enough that your Social Security payments are the supplement to your retirement savings, not the other way around. If you have access to a workplace retirement plan like a 401(k), use that; otherwise, consider opening an individual retirement account.

Other Retirement Fears

SmartAsset: Top 3 Fears Americans Have About Retirement

There are a lot of other retirement fears that Americans have, according to the TransAmerica Institute study. For instance, 22% of workers fear being able to find affordable housing in retirement. Around 32% fear not being able to meet the basic financial needs of their family, while 29% fear access to affordable healthcare.

All of these fears can be addressed by simply taking the time now to plan and save. Making sure to put aside enough money each month — and by making smart investments — are the best way to get prepared to face each of these challenges.

Bottom Line

Americans have a lot of fears about retirement. Taking steps now, like saving, investing and getting long-term care insurance can help assuage these fears. Also, don’t fall for stories that are designed to make you fearful — for instance, don’t worry about Social Security ending, but do make sure you have other money saved as well.

Retirement Planning Tips

  • A financial advisor can help you plan for a great retirement. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • Asset allocation is a key part of retirement planning. When you’re young, you should be invested mostly in stocks and other equities that will see their values grow. As you get older, your portfolio should get more conservative and turn to bonds and other safer investments.

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