With retirement comes the fear of being financially unstable, along with worrisome thoughts about health decline. Don’t feel alone, it’s important to acknowledge these fears, because it’s a completely normal feeling for seniors.
According to a survey conducted (December 2016) by the Transamerica Center for Retirement Studies (TCRS), workers fear retirement because:
- They could outlive their money (reported by 51%)
- Social Security may be reduced or eliminated (47%)
- Their health could decline, requiring long-term care (45%)
- Cognitive decline, including dementia and Alzheimer’s (32%)
Instead of retiring with anxiety and fear, retire with confidence and enjoyment. Although there will always be problems to tackle, there are many steps you can take to reduce these problems, to have a more fulfilling life as you age.
Let’s address the fears above to give you assurance going into your golden years.
Outliving Your Wealth
Ask yourself when you want to retire. In your 50’s? 60’s? 70’s? Money isn’t happiness, but you’re going to need it to retire. Think about being retired for 30-40 years. That’s a lot of cash you need to stay alive for a number of years.
Once you’re gone, you’re gone… grim… I know, but you want to spend as much time as you can on this earth with your family and friends… The bright side is that seniors are living longer and previous generations did not have that luxury… so there is more time for you to enjoy life and accomplish your goals.
Here are some steps you can take to find out how much money you will need in retirement:
Most people guess when it comes to finding out how much money they will need for retirement. A resourceful tool to use would be the retirement estimator from the Social Security Administration. If you need help calculating retirement, try finding/calling/emailing a financial planner/advisor and ask as many questions as possible.
Remember, some of the best strategies for retirement income need to be set up 5 to 15 years in advance. So here is your next step. Start thinking about retirement early, but be prepared to work past 60, this will increase your odds later in life. The longer you work, the more money you will have for retirement. The more money you have for retirement, the less strain you have financially. Plus you’re able to enjoy more activities. Make sure you delay social security as long as possible to maximize your lifetime payout.
Eliminating/Reducing Social Security
According to Steve Vernon of CBSNews, “Chances are very good that Social Security benefits will be cut in the near future to help the system remain viable for decades to come. The key question is whether funding deficits will be reduced by benefit reductions, tax increases or a reasonable combination of both.”
During President elect Donald Trump’s campaign he promised not to touch social security if elected. However, his GOP peers have proposed changes that could eliminate benefits, which is very unsettling for many seniors.
There is no easy way to solve this problem, however, you do have a voice. And that voice is to VOTE. Follow the debates. Follow your Congressional leaders. Let them know how you feel. Vernon suggests that you prepare to adjust your retirement plans in case your Social Security benefits are reduced. This includes saving more, working longer, and reducing your living expenses in retirement.
Health/Cognitive Decline & Long Term Care
When you think of retirement, the first thing that comes to mind for many seniors is MEDICARE. Medicare is very useful, but most plans do not cover long-term care expenses. And as you age, you don’t want your health decline to become a burden on your family.
The best way to tackle this issue is to take steps to improve your health. This will save you a lot of time and money in the long run. Try to:
- Eat more fruits and veggies
- Eat leaner meats
- Dink more water
- Exercise daily (try to walk at least 30 min every day)
- Quit smoking
- Quit drinking
- Sleep efficiently (8 hours each day)
- Stay social (visit friends & family, meet new people)
To fight against Alzheimer’s and Dementia:
- Eat healthy (Fruits and Veggies)
- Increase omega-3 fatty acids
- Control your blood pressure
- Have strong social support
- Challenge your brain (Do puzzles, word games, Sudoku, go through old family albums to increase memory)
You may follow all the steps above and still end up needing long-term care. Other steps to follow:
- Buy long-term care insurance
- Keep your home equity in reserve
- Buy a qualified longevity annuity contract
- Set aside funds you won’t touch until you need long-term care.
Life can truly be hard sometimes. And it can get even harder as you age. But living life in fear is not living at all. Stay confident and believe in yourself. As long as you know you did all you can to better life for you and your family, when the time comes, you can enjoy your golden years.
Sources: Transamerica.org, CBSNews, Prevention.com, SSA.gov, USNews, The Motley Fool