Retirement Anxiety: How Economic Conditions Are Affecting Americans' Plans
In a recent Quinnipac National Poll, it revealed that 68% of Americans are concerned that they won't have enough money to live comfortably in Retirement.
What's causing all the anxiety about retirement?
Persistent inflation, climbing interest rates, and a volatile market have contributed to increasing the anxiety levels of those contemplating or preparing for retirement. The age group most affected by this retirement anxiety are those individuals between the ages of 35 to 64. Their vision of the quality of life they had hoped for has been clouded by a storm of uncertainty caused by the aforementioned issues.
Retirement savings is their biggest financial concern right now. They are now looking at delaying their retirement and continuing to work. One silver lining in the survey is that concerns about losing their job is at the bottom of their list.
Americans indicated they cut back on:
* dining out
* vacation plans
* clothes shopping
* grocery shopping
* consumer electronics
* home improvement projects
* entertainment or leisure activities
Another area of major concern is that of long-term care. In a recent Lincoln Financial survey, 42% admitted that they were not well prepared for long-term care costs.
Additional information gathered indicates that due to economic conditions many are delaying purchases of big ticket items, such as furniture and appliances. Sadly, some have even indicated they have chosen to delay receiving medical treatment.
Here are some action steps that individuals can take to address their fear of not having enough money for retirement:
Start saving for retirement as early as possible: The earlier you start saving for retirement, the more time your investments will have to grow. Start by setting aside a percentage of your income each month towards your retirement savings.
Create a budget: Make a budget to see where your money is going and where you can make cuts. By cutting back on unnecessary expenses, you can free up more money to put towards your retirement savings.
Maximize contributions to retirement accounts: Take advantage of any retirement savings plans offered by your employer, such as a 401(k) or pension plan. If these plans aren't available to you, consider opening an individual retirement account (IRA) or Roth IRA.
Increase your income: Consider ways to increase your income, such as taking on a side hustle or asking for a raise at work. This will allow you to save more money towards your retirement.
Get professional advice: Consult with a financial advisor to get advice on how to best save for retirement and create a plan that works for you.
Consider delaying retirement: If you're concerned that you won't have enough money saved by the time you want to retire, consider delaying retirement for a few years to allow more time for your investments to grow.
Be disciplined: Stick to your savings plan and avoid making unnecessary purchases that can derail your retirement savings goals.
Action steps regarding your investments:
Investment portfolio: Individuals should review their investment portfolio with their financial advisor to ensure that it is aligned with their retirement savings goals and risk tolerance. The advisor can help them make any necessary adjustments to their portfolio to optimize their returns while minimizing risk.
- Tax planning: Individuals should discuss tax planning strategies with their financial advisor, including strategies for minimizing taxes on their retirement income and maximizing tax-deferred savings opportunities.
In conclusion, planning for retirement can be a daunting task, but it's essential for ensuring a financially secure future. By taking action steps now, individuals can reduce their fear of not having enough money for retirement.