Top 5 worries for retirement, according to recent survey’s
All of us will retire one day, though not all of us are completely confident with the financial side of things. This article will go through the top 5 biggest worries for retirement and how to combat them.
1. Fear Of The Unexpected
One of the biggest worries for retirement is having an unexpected medical expense, or other financial emergencies. This is a common retirement concern among 35% of respondents. Many people worry about unplanned expenses, as they can be devastating to your financial situation. The difficult thing about not knowing the future is that it leads to uncertainty of spending to much on retirement.
To Minimise Anxiety: Prioritise building your Emergency Savings, with a target to build 6 months of living expenses in a safe, liquid account. If you’re already in retirement, increase your Emergency Savings to 12-36 months of spending, depending on your risk tolerance. Have you done anything about this problem?
2. Insufficient Savings For Retirement
The second highest response was the worry about saving for retirement, with 32% of respondents citing these worries for retirement. Any and all working British people should be focused on saving for retirement as it must be taken seriously, it is a huge problem.
To Minimise Anxiety: To target this problem, increase your automated savings into a retirement account by 1% this month. You may not have an automated savings structure in place, if not then set one up this month. Increase the amount of your automated savings by 80% of your next raise. By doing this for the next three years, you will improve your financial situation.
3. Outliving My Retirement Savings
Nobody knows how long we will live. This makes the anxiety of outliving retirement savings an entirely reasonable retirement concern. None of us want to run out of money before we run out of life, but how can we know for sure? In reality, we can’t. There are, however, logical steps we can take to minimise this risk.
To Minimise Anxiety: In retirement planning, we aim for a 3% withdrawal rate, which is down from the historically safe 4% rate. Today’s interest rates could be a concern due to how low they are. If outliving your money is a major concern of yours, consider a longevity annuity. Study them fully before investing, they are a tool that could reduce your anxiety in this area.
4. When to collect Social Security
When it comes to Social Security, time is money. Suspending until full retirement age or beyond to collect payments increases your monthly benefit. Still, there are many important factors you need to consider, including your own goals, your health and life expectancy, and how the system works.
To Minimise Anxiety: Retirement doesn’t need to be about slowing down. It can be about having the time to enjoy the things you have always wanted to do. Put your retirement concerns at ease by planning ahead and laying a good foundation for your financial security. It will take away a lot of your retirement worries and allow you to focus on your new stage of life.
5. Paying for health care
According to a recent survey, health care expenses are in the top retirement concerns of people over age 50. Despite this, only 15% of pre-retirees have estimated how much they need to save for health care costs in retirement. Unanticipated medical expenses can derail years of retirement preparation, however, there are smart ways to plan now for the cost of health care later.
To minimise anxiety: Although treatment on the NHS is free at the point of delivery, there may still be some costs. However, much or all of the cost can be reclaimed, which should ease any added stress.