What Do U.S. Workers Fear Most About Retirement?


Two retired men playing golf.
The top retirement fears of American workers.

With inflation, constant news of layoffs, and a shaky economy, fears about retirement haunt U.S. workers.

Instead of picturing themselves trekking across the globe, golfing every day, or sitting on a tropical beach sipping umbrella drinks, Americans worry about not having saved enough, the cost of medical care, and changes to Social Security, among other concerns.

A recent TransAmerica Institute survey looked at the retirement outlook of American workers.

Here are the top retirement fears plaguing Americans right now:

1. Outliving Savings and Investments

People live longer than ever now thanks to advances in medicine and technology. A longer lifespan means more years of not working to finance. 38% of those surveyed fear their savings won’t last the rest of their lives.

Increasing your savings rate is the first thing you can do if you’re worried about not having enough money in retirement. Consider increasing your contribution if you’re participating in a 401(k) through your work. If you don’t currently have room in your budget to up your savings, think about cutting back on spending or increasing your income through a second job or side hustle.

Lifetime annuities are another way to generate retirement income. A guaranteed lifetime annuity is a contract purchased through an insurance company that pays out income for the rest of the purchaser’s life.

There are several types of annuities with different terms and conditions. It’s best to consult with a financial advisor to determine if a lifetime annuity is right for you.

2. Needing Long-term Care and Long-term Care Costs

Aging can mean requiring help. That help could come from moving in with family, a home health aide, or someone you hire to cook, clean, and do laundry. That could also mean moving into an assisted living facility or nursing home.

37% of workers surveyed worry they’ll need long-term care and 31% worry about the costs. When you can no longer live independently, paying for help is expensive. According to a 2021 Cost of Care Survey by Genworth, the cost of a private room in a nursing home averages $9,034 per month.

In addition to paying out of pocket, there are other ways to pay for long-term care when it becomes necessary. Medicaid and other government programs can provide assistance.

Long-term care insurance is another option. This type of insurance can cover services for people needing help with daily living. Benefits vary by policy, but you can buy nursing home-only coverage or a policy that covers in-home, nursing home, and hospice care.

3. Social Security Reductions or Elimination

There have been plenty of news stories about the possibility of Social Security becoming insolvent, getting significantly cut, or being eliminated. It remains to be seen whether any of that happens, especially with older Americans historically representing the largest voting bloc in the country. But 37% of those surveyed say changes to Social Security payments are a major concern.

Social Security isn’t typically enough to cover the average person’s living expenses on its own. Having a supplemental source of income when you’re not working helps, though. And that’s the key.

Make sure you’re saving enough for retirement so that Social Security is a supplement, not the primary source of your retirement funds. Take advantage of a 401(k) or other employer-sponsored retirement plan, especially if your company matches contributions. Consider opening an individual retirement account (IRA) as well.

If Social Security changes in the future, you want to be as unaffected as possible.

4. Being Unable to Support Family

Not being able to support the basic financial needs of their family is a fear for 30% of American workers. Being there for your family is extremely important, whether it’s a spouse, child, grandchild, or other relatives.

Being there for your loved ones sometimes means being financially responsible for them or providing financial help. Being unable to help is heartbreaking, but if you don’t have the means, there’s no other choice.

5. Other Retirement Fears

Americans have many fears about retirement. Not all of them are financial. 29% fear cognitive decline, dementia, or Alzheimer’s Disease. 27% fear losing their independence, and 25% fear feeling isolated and alone.

Addressing Retirement Fears

You might dream of traveling, spending more time with family or friends, and pursuing other interests in retirement. However, there are some very real challenges to those ideas.

Saving more, investing, paying off debt, and buying long-term care insurance can help alleviate some of those fears. Making healthier lifestyle choices and strengthening relationships can also make you less fearful.

Image credit: Unsplash+


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