Top 5 Concerns for Retirees (and How to Plan)
As retirement approaches, many individuals find themselves facing key questions and challenges. According to leading research from AARP, the Employee Benefit Research Institute (EBRI), and Fidelity Investments, the top five concerns for retirees are:
Financial Security – Many retirees worry about running out of money during retirement. In fact, Fidelity Investments reports that nearly half of Americans don’t feel confident in their ability to meet their retirement goals. Diversifying investments and creating a reliable income strategy can help mitigate this concern. Need a referral for a financial advisor? Let me know!
Healthcare Costs – As healthcare becomes a larger expense in retirement, many retirees worry about how to cover costs. EBRI’s 2024 Retirement Confidence Survey highlights that 30% of retirees are concerned about out-of-pocket medical expenses. While Medicare covers many needs, long-term care costs and prescriptions often add up. Budgeting for these expenses and considering long-term care insurance can provide peace of mind.
Longevity Risk – Retiring with enough savings to last a longer-than-expected lifespan is a key worry. According to a study by AARP, nearly 60% of retirees express concern about outliving their savings. Planning for a retirement that could last 30 years or more, as well as exploring guaranteed income options like annuities, can help safeguard against longevity risk.
Lifestyle Adjustments – Retirement isn’t just a financial change – it’s a lifestyle shift. Studies from AARP show that retirees often struggle with maintaining social connections and a sense of purpose. Finding hobbies, volunteer opportunities, or part-time work can help ease the transition and ensure that retirees stay engaged in fulfilling activities.
Inflation – Inflation erodes purchasing power over time, and for retirees living on fixed incomes, this can be a significant concern. A recent EBRI study found that 45% of retirees are worried about inflation reducing their ability to cover basic living expenses. To combat this, financial planners recommend investing in inflation-protected securities, such as TIPS (Treasury Inflation-Protected Securities), or adopting a flexible withdrawal strategy.