The fear of exhausting one’s savings and not having enough funds in retirement to pay for costly expenses like health care continue to stoke the fears of many Americans, according to a new survey from Bankrate.com.
When it comes to the biggest financial worries about retirement, 28% of Americans said they are afraid their medical expenses will be too high while 23% are concerned their savings will run out when they need them the most.
These worries often go hand-in-hand in the sense that they can create a cause and effect dilemma. For example, coupling expensive hospital bills with the unpredictable nature of when someone will require medical care, can act as a catalyst in draining one’s savings.
“What’s happening now is that Americans are very concerned. They are paying for more health care costs. People are realizing, ‘Wow, that can have a big impact on my budget,” said Daniel Keady, CFP professional, senior director of financial planning at TIAA-CREF, in the Bankrate article. “One cause of running out of money could be high health care costs.”
Worrying about the cost of health care is not unwarranted, especially considering recent estimates from Fidelity Investments, which indicated that a couple who retired in 2014 will need $220,000 to cover health care costs in retirement.
But even with the specter of not having enough funds to last in retirement being an ever present worry for many Americans, saving is easier said than done.
About 33% of those who responded to Bankrate’s survey said they just don’t have enough for daily expenses as their main reason for not saving more for retirement. Others cited family obligations (14%) as their main reason, while 29% said they were satisfied with the savings they have already accumulated.
Despite nearly one-third of respondents feeling content about their savings, the road to retirement is paved with unpredictabilities that can weigh on one’s financial health.
And though 42% of survey respondents expect to use Social Security to replace some of their income in retirement, many retirees may also be forced to consider other ways to supplement their savings in their non-working years.
View results from the Bankrate.com survey.
Written by Jason Oliva