9 Issues Making It Harder for Americans to Retire

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Worried man thinking about retirement
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Millions of workers can’t wait to leave the rat race behind. They dream of retiring to a new life where they can do the things they enjoy every day.

But finding a way to retire is often a struggle. Unfortunately, there are many obstacles outside our control that make it difficult to leave work behind.

Recently, the National Institute on Retirement Security polled more than 1,200 Americans and asked them to name the biggest factors that contribute to their struggle to prepare for retirement.

Following are the major stumbling blocks cited by the survey respondents.

9. The stock market is more volatile

Woman watching the stock market on computer
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Respondents who said they feel this is a:

  • Major factor making it harder to retire: 42%
  • Minor factor making it harder to retire: 37%

Is the stock market really more volatile? It’s doubtful. The market has always had ups and downs. It’s the nature of investing.

However, you can’t blame people for thinking investing has been a little scarier lately. The past few years have seen two bear markets. Sharp downturns like that feel awful, especially considering that — the October 1987 crash notwithstanding — the 1980s and 1990s were largely free of such plunges.

But in truth, it was the ’80s and ’90s that were the anomaly, not what we’ve seen more recently. To get the rewards from investing in stocks, you’ll need to endure a lot of bumps along the road to retirement.

If stock investing frightens you, check out “7 Ways to Slay Your Fear of the Stock Market.”

8. People are living longer

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Respondents who said they feel this is a:

  • Major factor making it harder to retire: 46%
  • Minor factor making it harder to retire: 39%

Living longer is a double-edged sword. Yes, you get to enjoy life on this planet for a few more years. But an expanded lifespan also means a longer retirement that you’ll need to finance.

It’s important to remember, however, that this is a good problem to have. It sure beats the alternative!

7. Most workers must DIY their retirement savings

Sad empty piggy bank
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Respondents who said they feel this is a:

  • Major factor making it harder to retire: 47%
  • Minor factor making it harder to retire: 38%

Hoping someday you’ll win the lottery? Or that some long lost, rich distant cousin will have pity and leave you a couple of million in her will?

For the vast majority of us, either scenario is unlikely. If you want a good retirement, you will probably have to fund and manage it for yourself. Nobody is going to magically appear and teach you the secret to getting rich.

Well, almost nobody. If you are ready to invest, we can offer some guidance in getting started. For more, check out “7 Keys to Stress-Free Retirement Investing.”

5. Increasing debt (tie)

Debt
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Respondents who said they feel this is a:

  • Major factor making it harder to retire: 56%
  • Minor factor making it harder to retire: 31%

For generations now, Americans have struggled to stay on top of their debts. Clearly, a large number of the survey respondents find themselves in this boat, with more than half citing debt such as student loans, housing or credit card debt as a major roadblock in their journey toward retirement.

In some cases, debt can feel overwhelming. But you can always start digging out of the hole, and the best time to do so is today.

Learn more about turning around your situation in “8 Surefire Ways To Get Rid of Debt ASAP.”

5. Fewer people have pensions (tie)

Pension
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Respondents who said they feel this is a:

  • Major factor making it harder to retire: 56%
  • Minor factor making it harder to retire: 31%

Employer-sponsored pensions have largely disappeared from the workplace, at least in the private sector. The burden of saving for retirement is now squarely on the shoulders of workers themselves. A lot of survey respondents lament this trend.

In today’s world, you have to create your own self-financed pension plan. Most people do that by saving in a workplace retirement account, such as a 401(k). And some of these workers actually do better than they would with a traditional pension.

To learn more about how they’ve done it, check out “7 Key Habits of 401(k) and IRA Millionaires.”

4. Middle-class salaries are not increasing

Man with no money
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Respondents who said they feel this is a:

  • Major factor making it harder to retire: 59%
  • Minor factor making it harder to retire: 30%

Many workers find it difficult to convince the boss to give them a raise. Others who are fortunate enough to get a wage hike see it quickly swamped by the rising tide of inflation.

If you feel like you are underpaid, it never hurts to ask for a raise. But before doing so, prepare to negotiate by reading “10 Tips to Remember When Asking for a Raise.”

3. Rising cost of long-term care

Nursing Home
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Respondents who said they feel this is a:

  • Major factor making it harder to retire: 67%
  • Minor factor making it harder to retire: 24%

Long-term care costs can quickly crack even a large nest egg. Survey respondents know this, with many worrying about how they will finance such care if they eventually need it.

This is a tricky subject. Some financial experts recommend buying long-term care insurance to protect your finances should you ever need this care. Other experts aren’t so sure. Money Talks News founder Stacy Johnson offers his take in “Should I Buy Long-Term Care Insurance?.”

2. Rising cost of health care in retirement

Man getting heart checked
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Respondents who said they feel this is a:

  • Major factor making it harder to retire: 73%
  • Minor factor making it harder to retire: 21%

A large majority of survey respondents worry about the rising cost of health care and how it will impact their ability to retire. Surprisingly, numerous studies over several years have found that the biggest cost in retirement — by far — is actually housing, which didn’t even make this list. So, give a lot of thought to how you will finance housing costs.

With that out of the way, you can turn to health care costs, which indeed are a burden for many retirees. If you are already in retirement, chances are good that you are on Medicare. To learn more about making this program work for you, check out:

If you are still working and planning for retirement, stuffing money into a health savings account today is a great — and, sadly, overlooked — way to prepare for health care costs in retirement. You need to have a high-deductible health insurance plan to qualify, but if you do, the rewards can be enormous in your golden years.

For more on HSAs, check out “3 Ways a Health Savings Account Can Improve Your Finances.”

1. High inflation

Man looking at inflation
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Respondents who said they feel this is a:

  • Major factor making it harder to retire: 74%
  • Minor factor making it harder to retire: 20%

Inflation is probably the biggest threat to any retiree’s finances. The value of the dollars in your nest egg can drop precipitously if prices steadily rise over a number of years.

Every retiree should worry about inflation and its potential to erode living standards. If today’s rising prices are holding you back from retiring, check out the tips in “How to Control Your Personal Inflation Level.”

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