5 Threats to Your Retirement Savings

Almost Half Of Americans Fear Running Out Of Money In Retirement

A new report says health and money are the top concerns for retirees worldwide.

1. Rises in the Cost of Living

Eggs are priced 131 percent higher today than they were in 1988. Houses cost 194 percent more. In other words, it’s not just college tuition and health care that take a beating from inflation. Your monthly housing cost will never rise.

2. Providing Financial Support for Family Members

One common threat to budgets is the desire to help grown children (and sometimes grandchildren) who are struggling financially. Periodic gifts to kids to help with routine items such as child care or cellphone payments have a tendency to morph into ongoing and more significant expenses over time.

The burden is widespread: Six in 10 people age 50-plus are providing financial support to family members, according to Age Wave, at an average cost of $15,000 over five years.

3. Expensive Daily Activities

During your working years, you’re time-starved, but once you stop working, you may have enough time to do whatever you want. That can get boring. Retirees watch, on average, 49 hours of TV a week. This freedom can also become expensive, especially when your desire to keep up with others and socialize doesn’t end.

4. Paying for Health Care

Every year, Fidelity Investments publishes an estimate of the amount that a 65-year-old couple will need for health care in retirement. The most recent number, $280,000, sounds high until broken down into Medicare premiums, copays, and prescription costs over many years.

Illness is the number one reason people wind up not working as long as they expected, making health care planning essential for retirement.

5. Living Longer

Finally, longevity itself can be a financial challenge. Life expectancy for a 65-year-old woman is about 87 and for a man about 84, but many people live well beyond those averages.

One in four people will live past 90 and one in ten will live past 95. That means when using a retirement calculator, it may be wise to plan for living to 95 or even 100.

Source: AARP

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