Top Retirement Concerns and How to Address Them

Retirement piggy bank
Saving in a piggy bank | Brian A. Jackson/Getty Images

If you’re getting close to leaving the work force permanently, you likely have several retirement concerns. As income reduces, lifespan extends, and health becomes frail, life after work can be a scary time.

“While Americans are fortunate to be living longer, extended retirement brings additional costs and challenges,” said Tania Slade, national head of wealth planning at BMO Wealth Management U.S. “It’s crucial that people approaching retirement work closely with financial planners, spouses, and family members to come up with a viable, long-term strategy that supports them throughout their elder years and enables them to leave the legacy they desire.”

BMO Wealth Management recently conducted a study analyzing the retirement concerns and fears of older Americans. The researchers also offer suggestions for addressing some of these pressing issues. Here are some of the survey results.

Key findings:

  • Americans’ top retirement concerns include failing health and high costs (46%), becoming a burden to family members (45%), and maintaining financial security (44%).
  • Most older Americans want to leave a lasting legacy. More older Americans would like to be remembered for the values they’ve lived by and the life lessons they’ve imparted than for the wealth they accumulated.
  • Americans are living longer, so retirement and estate planning are vital.

Top retirement concerns

Outliving retirement savings. Currently, American men can expect to live until roughly 76 years old and American women can expect to live until about and 81. The fact that retirees are living longer is bittersweet. A longer life means more years with loved ones, but it also means you’ll need more cash to sustain you in retirement. As a result of a longer lifespan, the average retirement period has been extended to 18 years. Many boomers are responding by remaining in the workforce longer, so they can put away more money for retirement.

When and how much to save for the future. The study found partners often clash when it comes to setting long-term financial goals. Most disagree on when and how much to save for the future (28%), followed by retirement goals (27%), and how personal assets and possessions should be distributed (25%).

Retirement income. Survey participants said their primary concern regarding investment and retirement issues is a desire to maximize retirement income (22%), fear of outliving retirement savings (21%), and long-term care costs (19%).

How to address common retirement concerns

BMO Wealth Management offers a few tips to help reduce common retirement concerns:

  • Keep your financial plan current. Since people are living longer, it’s best not to arrange a financial plan based on average life expectancy rates. If this is the case, you could be underestimating your needs. The older you get, the more likely it is that you will outlive the average life expectancy.
  • Think about life after work. Depending on your plans, it’s likely you’ll need to work longer to be able to afford your anticipated retirement lifestyle. Devise a solid strategy so you can have a smooth transition.
  • Know your personal and family medical history. Your family health history could have a significant impact on your finances in retirement. Medical costs are some of the biggest expenses after retirement. Be sure you understand what the transition from an employer-sponsored health plan to something else (i.e., Medicare) will likely entail, including out-of-pocket expenses.
  • Get help from financial professionals. Just as you consult with medical professionals to manage your physical health, you should also hire financial professionals (such as attorneys, accountants, and financial advisers) to manage your financial health.

Read more: People Are Only Saving Half of What They Should for Retirement

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