The 6 Top Retirement Concerns and How to Address Them

When we’re young, retirement seems impossibly far away, almost like a pleasant daydream. So we spend most of our adult lives working hard to give our families a better life, saving up what we can. The kids go to college, and now, you’re eligible for Social Security benefits. Suddenly, an idyllic retirement is already knocking at your door.

At least, that’s the way retirement should be. The harsh reality is that for millions of Americans, retirement is not the idyllic end to a storied career it’s often made out to be; instead, it’s a time of worry and anxiety. 

Many pre-retirees and retirees believe their nest egg isn’t secure and feel they can’t afford to stop working. Even when they do retire, they worry about how to maintain their income and lifestyle.

If you’re stressing out about your retirement plans and aren’t sure whether you’re on track to meet your retirement goals, you are not alone. While no two retirement plans will be exactly the same, most pre-retirees and retirees share common retirement fears and concerns.

Here are some of the most prominent retirement concerns.

1. Maintaining a stable income stream

Did you know that 66% of Americans worry about running out of money in retirement, while 18% are concerned about affording daily expenses after they retire? 

With the future of Social Security uncertain, it’s not hard to understand why so many Americans, including those well below retirement age, are stressed out over whether they will be able to afford retirement. 

The fear of running out of money in retirement is so prominent that 21% of Americans will consider taking a part-time job to help with their expenses even after retiring.

Simply put, without a steady income stream, managing debt, paying bills, and affording basic needs can quickly become overwhelming during retirement.

2. Paying off debt

According to Bank of America, the average 65-year-old in 2015 had nearly $50,000 in debt, compared to less than $34,000 in 2003. This represented a 60% increase in debt loads for borrowers between 50 to 80 years old. 

This trend isn’t likely to reverse anytime soon. As of Q2 2022, U.S. household debt has surpassed $16 trillion thanks to a $207 billion increase in mortgage, credit card, and auto loan debt. 

When one in every ten Americans worries that they may take too much debt into retirement, knowing how to manage debt affordably can provide some much-needed peace of mind.

3. Managing investment portfolios

With rising interest rates and talks of an impending recession, anyone with a sizeable nest egg may be worried about the future of their portfolios.

What do you do when the markets keep going down? How do you adjust your portfolio allocation to best weather the storm? Should you change your investment strategy, or do you simply stay the course?

When it comes to investing, it’s impossible to say for sure what the future holds or how investments may perform. Historical performance does not necessarily correlate to future price action, especially in the face of black swan events like COVID-19. 

Without an experienced financial advisor in your corner, it can be very difficult to navigate market volatility and risk and stay disciplined with your retirement portfolio. 

4. Stretching your savings

In the 21st century, folks are living longer than ever before. Nearly a quarter of today’s 65-year-olds are expected to live up to the ripe old age of 90, according to the Social Security Administration. 

With longer life comes another retirement concern: outliving your savings. A 2019 survey by the Aegon Center for Longevity found that nearly half of Americans are worried they would not have enough in their nest egg to see them through retirement. 

Knowing exactly how much you can spend without breaking the bank is the key to enjoying your retired life without constantly worrying about how long it will last.

An experienced financial advisor can help you come up with a personalized spending schedule so you can take control of your finances.

5. Navigating the loss of a spouse

Losing a spouse in retirement is one of the biggest fears of every retiree. Unfortunately, losing a spouse could significantly impact your retirement income, overall savings, health, and more. 

Sometimes, the spouse who passes away first may have been the one managing the family’s finances. In this case, the surviving spouse often finds themselves unprepared or unqualified to manage their retirement savings. They may even be too heartbroken or embarrassed to tell their friends and family.

Financial education is key to preserving and even growing retirement savings despite the death of a spouse.

6. Affording quality healthcare

Entering retirement without planning for ongoing medical expenses could quickly deplete a lifetime of savings.

Medical bills can and will quickly eat away at your nest egg, whether for COVID-19, cancer, Alzheimer’s, physical limitations, home health aides, or hospice care.

How much should the average retiree have saved up just for their medical expenses in retirement? Fidelity estimates that in 2022, the average retired couple would need almost $300,000 to cover medical costs sufficiently.

Without a trustworthy saving and spending plan for your medical expenses in retirement, it’s all too easy to think you have enough saved up when you don’t.

Nipping common retirement concerns in the bud

It’s normal to be worried and anxious about your retirement life. But that doesn’t mean you have to go into it blindly.

If you want to maximize your chances of enjoying a peaceful retirement with a secure nest egg and a steady income stream, it pays to be well-prepared for whatever the future may hold. 

Even if you can’t plan for every contingency—and no one can—having a detailed and personalized retirement plan can give you the tools and confidence you need to sail into the sunset, just like you always wanted.