This Is the Nation’s Biggest Retirement Worry

Retirement worry
Photo by Sasils / Shutterstock.com

Future medical expenses haunt the imaginations of millions of Americans. In fact, paying for health care costs during one’s golden years is Americans’ No. 1 retirement worry, according to Franklin Templeton Investments.

The firm’s latest annual Retirement Income Strategies and Expectations (RISE) survey — for which 2,000 adults were polled — was released earlier this year. it found that the top three retirement concerns are:

  1. Paying for medical and pharmaceutical expenses — cited by 31 percent of respondents
  2. Paying off debt — 18 percent
  3. Funding assisted-living care — 15 percent

Perhaps we should not be surprised. After all, costly health problems tend to strike later in life. And it has been projected that a 65-year-old couple who both retire in 2018 would need an estimated $280,000 to pay for their health care expenses throughout retirement.

A hidden fix for health care funding concerns

As it turns out, many Americans are not doing all they can to prepare for health care costs in retirement. The Franklin Templeton survey found that 76 percent of folks who were still working weren’t using a health savings account (HSA), or didn’t have access to one.

Of course, you can’t be faulted for not contributing to an HSA if you are not eligible for one. To be eligible, you must have a high-deductible health insurance plan. If you are not allowed to contribute to an HSA, you need to check out other options for cutting costs. You can start by reading “15 Ways to Beat the High Cost of Medical Care.”

If you are eligible for an HSA, though, opening and contributing to one is perhaps the best way to save money to pay for your medical costs in retirement — or before.

Kevin Murphy, senior vice president and national retirement plan strategist for Franklin Templeton’s U.S. Defined Contribution Division, notes that HSAs are often thought of as IRAs or 401(k) accounts for medical expenses. This is true in that HSAs are a tax-advantaged account in which you can save money for medical expenses.

From the tax perspective, though, an HSA is better than any retirement account. As we detail in “3 Bold Ways Retirees Can Cut Health Care Costs in 2018,” HSAs offer a unique hat trick of tax benefits:

  • Contributions are tax-deductible in the year they are made.
  • Gains on contributions grow tax-free.
  • Withdrawals are tax-free if you spend the money on qualified medical expenses.

Want to learn more about the potential value of HSAs? Check out “5 Reasons a Health Savings Account Is a Great Place to Stash Retirement Cash.”

What worries you most about retirement? Share it with us by commenting below or over on our Facebook page.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Read Next
7 Mistakes Guaranteed to Ruin Your Retirement
7 Mistakes Guaranteed to Ruin Your Retirement

Make even one of these money mistakes, and you’ll probably end up eating ramen noodles in your golden years.

Avoiding These 5 Foods Could Save Your Vision as You Age
Avoiding These 5 Foods Could Save Your Vision as You Age

Millions of Americans may be able to prevent an incurable cause of blindness by making a basic change.

5 Ways to Avoid Taxes on Social Security Income
5 Ways to Avoid Taxes on Social Security Income

Here’s how to minimize and delay the chunk that Uncle Sam claims.

Why Half of Retirees Now Owe Taxes on Social Security
Why Half of Retirees Now Owe Taxes on Social Security

Growing numbers of seniors are paying taxes on their Social Security benefits, but you might be able to avoid this fate.

9 Affordable Ways to Make Your Home Look Expensive
9 Affordable Ways to Make Your Home Look Expensive

These products from Amazon add elegance to your home without the expense.

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Most Popular
7 Kirkland Signature Items to Avoid at Costco
7 Kirkland Signature Items to Avoid at Costco

Even if it seems you save a bundle buying Costco’s Kirkland Signature brand products, they may not be the bargain they appear to be.

If You Find This Thrift Shopping, Buy It
If You Find This Thrift Shopping, Buy It

Whether you resell it for a big profit or add it to your own wardrobe, this type of clothing is a hidden steal.

3 Ways to Get Microsoft Office for Free
3 Ways to Get Microsoft Office for Free

With a little ingenuity, you can cut Office costs to zero.

9 Things You’ll Never See at Costco Again
9 Things You’ll Never See at Costco Again

The warehouse store offers an enormous selection, but these products aren’t coming back.

This Surprise Factor Can Raise Your Risk of Dementia
This Surprise Factor Can Raise Your Risk of Dementia

Nearly half of U.S. residents may face this threat.

Organize Your Home With These 10 Thrift Store Finds
Organize Your Home With These 10 Thrift Store Finds

Resolve to be clutter-free in 2021 with these secondhand purchases.

11 Laws You Could Be Breaking Without Knowing It
11 Laws You Could Be Breaking Without Knowing It

Seriously? Fibbing about the weather is a crime? This and other little-known legal traps await the unwary.

Is This Treatable Condition Causing Your High Blood Pressure?
Is This Treatable Condition Causing Your High Blood Pressure?

Researchers say too many doctors are overlooking this potential source of hypertension.

13 Things Seniors Can Get for Free — or Almost Free
13 Things Seniors Can Get for Free — or Almost Free

There are many ways to get cheap or free services and goods after reaching a certain age.

These Are the 3 Best Used Cars You Can Buy
These Are the 3 Best Used Cars You Can Buy

These vehicles boast reliability, safety and long-lasting value.

Taking a Multivitamin? Here’s Why You Should Reconsider
Taking a Multivitamin? Here’s Why You Should Reconsider

A new study has bad news for the millions of Americans who spend money on multivitamins.

21 Items to Cut From Your Budget That You Won’t Even Miss
21 Items to Cut From Your Budget That You Won’t Even Miss

Start off the new year by implementing these small-but-smart savings strategies. They’ll soon add up.

Internet Providers Can’t Charge You for This Anymore
Internet Providers Can’t Charge You for This Anymore

Starting this month, your ISP no longer can bill you for this fee.

15 Painless Ways You Can Cut Costs in 2021
15 Painless Ways You Can Cut Costs in 2021

Follow these tips to save, so you’ll have money for things that really matter.

9 Small Expenses That Are Bleeding Your Budget Dry
9 Small Expenses That Are Bleeding Your Budget Dry

Keep more of future paychecks by eliminating these budget-busting unnecessary expenses.

Prepare to Pay More for These 31 Drugs in 2021
Prepare to Pay More for These 31 Drugs in 2021

More than 700 prescription medications have seen price hikes so far this year. Here’s a look at the worst.

5 States Lowering Taxes This Year — and 2 Raising Them
5 States Lowering Taxes This Year — and 2 Raising Them

State personal income tax rates, brackets and deductions just changed in these places.

11 Huge Retirement Costs That Are Often Overlooked
11 Huge Retirement Costs That Are Often Overlooked

Does your retirement budget account for all of these costs?

7 Tricks to Cleaning Your Bathroom Faster
7 Tricks to Cleaning Your Bathroom Faster

These tips can get your bathroom sparkling with little time and no elbow grease.

View More Articles

View this page without ads

Help us produce more money-saving articles and videos by subscribing to a membership.

Get Started

Add a Comment

Our Policy: We welcome relevant and respectful comments in order to foster healthy and informative discussions. All other comments may be removed. Comments with links are automatically held for moderation.