Retirement is supposed to be a time of blissful relaxation. And for millions who have left their offices, factories and other job sites, post-work life is everything they dreamed it would be. But that is not the full retirement picture.
Worries never stop, even during your golden years. Now that you no longer have a steady paycheck, financial angst can easily turn into outright panic.
Recently, hundreds of retirees revealed their biggest financial fears in a new report, “The Four Pillars of the New Retirement: What a Difference a Year Makes” from Edward Jones and Age Wave.
Following are the top financial worries that scare today’s retirees.
6. Tax increases
Retirees who cite this among their greatest financial worries: 31% (up from 18% in 2020)
Since coming into office, President Joe Biden has been clear about his intention to raise taxes on the wealthiest Americans. Perhaps that chatter is making a few folks nervous. Or, maybe many people are just habitually fearful that their taxes will rise someday.
Whatever the reason, 31% of retirees say their biggest financial worries include that taxes will increase. That’s a substantial jump from May 2020, when just 18% fretted over the possibility that the government might sharpen its tax ax.
For more about how to hold on to more of your cash, read “10 Types of Retirement Income That Are Not Taxable.”
4. Inflation (tie)
Retirees who cite this among their greatest financial worries: 32% (up from 24% in 2020)
If you watch the news at all, you cannot miss all the talk about inflation. Prices are rising on many products, as we have noted. Some experts believe this sticker shock will turn out to be temporary. Others are not so sure.
As prices climb, worries grow — and the share of retirees who count inflation among their greatest financial worries has grown by 6 percentage points in less than a year, the latest Edward Jones/Age Wave study shows.
Money Talks News founder Stacy Johnson recently addressed fears of rising prices in the podcast “Is Inflation About to Trash Your Investments?”
4. Outliving my savings (tie)
Retirees who cite this among their greatest financial worries: 32% (up from 30% in 2020)
The typical worker spends decades on the job. For the vast majority of that time, money arrives every few weeks in the form of a paycheck or other type of remuneration.
Once you retire, the flow suddenly dries up. Retirees are forced to live off their savings and Social Security benefits. So, it is no surprise that 32% of retirees say their biggest financial fears include outliving their savings.
3. Significant economic downturn/recession
Retirees who cite this among their greatest financial worries: 38% (up from 35% in 2020)
Just over a decade ago, the Great Recession swooped across the country, leaving millions unemployed and countless others struggling to keep their homes.
After a long and modest recovery, the economy finally ignited — only to sink again last year, as the COVID-19 pandemic laid waste to jobs everywhere. Many Americans are only beginning to dig out of that hole.
So, given that track record, you cannot blame 38% of retirees for saying their biggest financial worries include a significant economic downturn or recession.
No matter how good things get, the next downturn is just over the horizon. Prepare for it by reading “9 Ways to Brace Yourself for the Next Recession.”
2. Unexpected expenses
Retirees who cite this among their greatest financial worries: 56% (up from 47% in 2020)
As with any other time of life, things happen in retirement when you least expect them — and when they are most unwelcome.
Perhaps you are diagnosed with a chronic and expensive health condition. Or, maybe a swollen river rushes into your home just after you let your flood insurance policy lapse.
Such expenses can ruin the best-laid retirement plans. Learn how to shore up your finances today by checking out “7 Money Moves You Should Make After Retiring.”
1. Health costs, including long-term care
Retirees who cite this among their greatest financial worries: 58% (up from 52% in 2020)
Nobody lives forever. The human body wears down, and eventually wears out.
As the years fly by, our health care needs typically grow exponentially. Few of us are immune to the worry that a devastating health diagnosis could wreck our finances.
In fact, 58% of today’s retirees say health care costs — including those associated with long-term care — are a source of their biggest financial worries.