6 Ways Older Americans Feel Unprepared for Retirement


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Do you feel a little uncertain about your ability to retire comfortably? you are not alone.

In its 2021 Retirement Preparation Research, the Insured Retirement Institute asked nearly 1,000 American workers, ages 40 to 73, for their thoughts on exactly that. The survey notes that many workers are “unsure about their retirement prospects.”

The institute notes that “most of them did not save enough to bridge the gap between what Social Security would provide and what their savings could generate, especially since many of them plan to retire before full retirement age.”

The Institute’s findings suggest that the following concerns keep the majority of older workers awake at night. Do any of them resonate with your own experiences?

The ability to recover from a market correction

A man worried about the volatile stock market
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Respondents who trust this aspect of their retirement preparation: 29%

Overall, only 29% of respondents said they would be able to recover financially after a downturn in the stock market. Interestingly, both the younger (37%) and older (34%) age groups surveyed are the most confident about getting out of a serious market correction.

The Insured Retirement Institute said this may be because younger workers (defined here as those between the ages of 40 and 45) know they will have more time to redeem their retirement accounts and that older workers (ages 67 to 73 year) tend to have less money in risk investments.

Working part-time in your golden years can be a good hedge against market losses. A regular salary could mean you can withdraw less money from your retirement account, giving your investments a chance to rebuild.

Having enough money for long-term care

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Respondents who trust this aspect of their retirement preparation: 33%

There’s a good reason people are afraid of it: The average cost of long-term care in the United States can range from $1,603 to $8,821 per month.

And Medicare does Not Long term care coverage. Medicaid, another state health insurance program, is often covered, but Medicaid is generally only available to low-income people.

Unless you purchased long-term care insurance when you were younger, it is actually possible to manage your savings to pay for this care.

Having enough money to cover medical expenses

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Respondents who trust this aspect of their retirement preparation: 42%

Overall, 42% of those surveyed believe they will have enough money for whatever medical care they need in retirement. But they may not know that Medicare doesn’t cover everything—a fact that catches the eye of quite a few retirees when the time comes for things like hearing aids, routine vision care, and most dental work.

It is worth noting that only 24% of those aged 67 to 73 believe that they will be able to cover all of their medical expenses. It’s possible that 76% of that group was there, and they paid out of their own pockets for it.

Prepare well for retirement

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Respondents who trust this aspect of their retirement preparation: 43%

Overall, 67% of respondents wished they had started saving for retirement early, and 65% wished they had saved more.

A third of respondents currently save less than 5% of their income, versus the 10% to 15% recommended by many financial planners. The Insured Retirement Institute describes current savings rates as “inadequate” for the task of keeping retirees afloat.

There is a disconnect between the concepts of “retirement” and “saving for retirement”. Only 4 out of 10 tried to calculate how much they should allocate now in order to have enough money when they stop working.

Adequate retirement income

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Respondents who trust this aspect of their retirement preparation: 44%

A third of those surveyed plan to retire before age 65, which means they will receive permanently reduced Social Security benefits. Social Security was not intended to be the only source of income in retirement; In fact, the average monthly benefit for retirees is just $1,559.

The survey indicates that workers “may have [retirement] Unrealistic income expectations.

For example, 62% of those who earn between $30,000 and $75,000 per year say they expect a retirement income of $45,000 or more per year. Since these workers will likely receive $25,000 or less in Social Security benefits, they will need $20,000 per year in personal retirement savings to make up the difference. But as previously noted, many do not save enough and some do not have savings at all.

Having enough money to live independently

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Respondents who trust this aspect of their retirement preparation: 44%

Overall, less than half of the survey respondents (44%) believe they will have enough money to live independently in retirement. The number rises to 49% among ages 56 to 61 groups.

They have cause for concern: Among those who live to age 65, about 70% will need long-term care before they die, according to the US Department of Health and Human Services. This care is usually for a relatively short period of time – but as mentioned earlier, long-term care costs big bucks.

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