Many Americans may not go completely broke in retirement, but the fear of running out is real. According to a February 2021 research report by the National Institute on Retirement Security, 56 percent of respondents said they are concerned about achieving a financially secure retirement.
Almost Half Of Americans Fear Running Out Of Money In Retirement
New report says health and money are top concerns for retirees worldwide
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.
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. “We saw caregiving coming,” Dychtwald says. “We didn’t see this coming.”
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, Dychtwald observes.) This freedom can get expensive, too, especially when your desire to keep up with others, and hang out with them, doesn’t end.
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 ridiculous until you break it down; it translates into roughly 20 years (for men) and 25 years (for women) of Medicare premiums, copays and prescription costs, or about $5,000 to $6,000 per person per year. While the cost of that health care shouldn’t be astounding, the impact of illness still is, Dychtwald says. Illness is “the No. 1 reason people wind up not working as long as they think,” he adds. What’s more
Finally, there’s longevity in and of itself. Though there have been many headlines about our longer life spans, Dychtwald says the extra years still come as a shock. In part that’s because we misunderstand the concept of an average life span.
When you read that the life expectancy of a 65-year-old woman is 87 and that of a 65-year-old man is 84, that means many people pass their gendered benchmarks and keep going. One in 4 pass 90; 1 in 10 pass 95. You get the idea. Which means that if and when you use a retirement calculator, you should plug in at least “95” when you’re asked how long you expect to live. Maybe “100.”
Source: AARP
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