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Disturbing percentage of Americans fear never being able to retire

GOBankingRates logo GOBankingRates 6/12/2018 Cameron Huddleston

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When you think about retirement, is it something you look forward to? Or do the ugly truths about retirement actually make you feel anxious?

It might seem strange that a period of your life that’s supposed to be about doing things on your own terms could create a sense of dread. But a GOBankingRates survey found that many Americans have a variety of fears about retirement.

Keep reading to find out what is scaring people about retirement, and what you can do to boost your retirement savings now.

Top Fear Is Never Being Able to Retire

a screenshot of a cell phone © GOBankingRates

GOBankingRates asked more than 5,000 adults across the U.S., “Of the following, what do you fear the most about retirement?” Respondents could select one of these six answers:

  • Losing access to Social Security benefits
  • Never being able to retire
  • Not being able to afford healthcare costs
  • Not being able to afford my lifestyle
  • Not having anyone to enjoy retirement with
  • Suffering from boredom

The survey found that Americans’ biggest fear of retirement is that they won’t be able to retire. Nearly a quarter of respondents — 23.90 percent — said this is their biggest worry.

“It is a real fear, as research and my own experience with thousands of client meetings tells me that the average American is not financially ready for retirement,” said Josh Nelson, a certified financial planner and founder of Keystone Financial Services in Loveland, Colo. The reason many Americans aren’t financially prepared for retirement is because they aren’t saving enough — or anything at all. Another GOBankingRates survey found that 42 percent of Americans have less than $10,000 saved for retirement. Of those, 13.73 percent have $0 saved.

The low savings rate among Americans might also explain why the second-most-common retirement fear is “not being able to afford my lifestyle,” with 21.78 percent of respondents naming this as their top worry. An almost equal percentage of respondents — 21.29 percent — are worried about being able to afford healthcare costs in retirement.

Even though the future of Social Security is uncertain, only 9.17 percent of Americans said their biggest fear is losing access to this source of retirement income. And not having anyone to enjoy retirement with isn’t a top concern for most Americans, either. Just 8.88 percent said this is their biggest retirement fear.

Being bored, on the other hand, is a bigger concern. For 14.98 percent of respondents, “suffering from boredom” is their top worry about retirement.

Keep Reading: The Astonishing Reasons Many Aren’t Ready to Retire

Not Being Able to Retire Is a Bigger Fear Among Women

a screenshot of a cell phone © GOBankingRates

The survey found that the top three retirement fears among women and men are the same: never being able to retire, not being able to afford their lifestyles and not being able to afford healthcare costs. However, a higher percentage of women than men are worried about being able to afford their lifestyle — 25.24 percent versus 20.30 percent.

Women also are more likely than men to say their top fear is never being able to retire — 25.73 percent versus 22.97 percent. This might be because women are falling behind men when it comes to saving for retirement. The GOBankingRates 2018 Retirement Savings survey found that 45.24 percent of women have no savings or $10,000 or less, compared with 39.83 percent of men. And 19.18 percent of men have $300,000 or more in retirement savings, compared with just 13.20 percent of women.

Learn: Why Women Aren’t Living as Comfortably as Men in Retirement

“Women tend to feel more insecure about retirement finances because they have made less money, paid less into Social Security, had care-giving breaks in their careers and haven’t been able to save as much as they’d like,” said Kristi Sullivan, a certified financial planner and owner of Sullivan Financial Planning, LLC in Denver. “They are also rightly concerned that they will have longer lives and their savings will need to last longer.”

Men, on the other hand, are more likely than women to be worried about being bored in retirement. The survey found that boredom is the top retirement fear for 17.16 percent of men compared with 10.54 percent of women.

Men might be more likely to be worried about being bored because, according to Monica Dwyer, a wealth advisor at Harvest Financial Advisors LLC in West Chester, Ohio, their identity tends to be more tied to their jobs. “Some men find it difficult to give up working,” she said.

However, retirement doesn’t have to mean giving up work altogether. To avoid retirement depression, you can find a work-from-home job or turn a hobby into a business to keep you engaged and bring in extra cash.

Healthcare Affordability Fears Are Tied to Age

a screenshot of a cell phone © GOBankingRates

The survey found that Americans’ fears about retirement shift with age. Never being able to retire is the biggest fear among younger adults, with nearly 30 percent of respondents ages 18 to 54 naming this as their top retirement concern.

However, older adults are much more concerned about whether they’ll be able to afford healthcare. In fact, this is the top fear among adults 55 and older. For 27.41 percent of respondents ages 55 to 64 and 28.06 percent of respondents 65 and older, “not being able to afford healthcare costs” is their biggest fear.

Yet, only 12.15 percent of adults 18 to 24 are worried about healthcare costs in retirement, the survey found. Just 14.86 percent of respondents ages 25 to 34 said healthcare costs are a top retirement fear.

“The older you get the more important healthcare becomes because you see your friends and relatives getting ill and dying,” Dwyer said. “Healthcare affordability becomes a reality. At 18, you’re invincible.”

To help make healthcare more affordable in retirement, don’t retire before you are eligible for Medicare, said Scott Bishop, executive vice president of financial planning at STA Wealth Management in Houston. Otherwise, unless you will get retiree health benefits from an employer, you’ll have to pay for individual health coverage to bridge the gap until you can sign up for Medicare.

Each Generation Has Different Fears

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Although younger adults aren’t nearly as concerned about healthcare costs as older generations are, they are worried about Social Security. Millennials ages 25 to 34 are the most likely of any generation to say that losing access to Social Security benefits is what they fear most about retirement.

This isn’t surprising for financial planners. “Younger adults tell me that they are not counting on Social Security as the plan for retirement,” Nelson said. “Nearly every one of my younger clients asks me to assume zero Social Security benefits for their retirement planning.”

Gen Xers are already starting to worry more about healthcare now they’ve reached middle age, and they’re less concerned about more abstract worries like suffering from boredom.

Related: Here’s What Social Security Will Look Like by the Time Millennials Retire

Retirement Fears Vary From State to State

Senior man in workshop © Liderina / Getty Images/iStockphoto Senior man in workshop

Although the survey found that the top worry nationwide is not being able to retire, it isn’t the biggest fear in every state. Idaho has the highest percentage of respondents — 41.30 percent — who said “never being able to retire” is their No. 1 concern. Rhode Island, on the other hand, has the smallest percentage of respondents who said this is their biggest fear — just 4.17 percent.

Yet, Rhode Island has the highest percentage of respondents — 33.33 percent — who said not being able to afford their lifestyle is their No. 1 fear of retirement. This also is the top fear in 14 other states.

Find out: What a Comfortable Retirement Will Cost You in Every State

Healthcare costs are the biggest concern in Wyoming by far, with 36.36 percent of respondents choosing this option. Healthcare costs also are the top worry in 15 other states.

There is only one state where the biggest fear among respondents isn’t not being able to retire, not being able to afford their lifestyle or not being able to afford healthcare costs: Mississippi. Instead, the No. 1 worry there is not having anyone to enjoy retirement with — with 25 percent of respondents choosing this option.

How to Overcome Retirement Fears

Retiree relaxing on sofa. © Jim Arbogast/Getty Images Retiree relaxing on sofa.

Never being able to retire seems to be a persistent fear among Americans. About the same percentage of survey respondents said it was their top concern when GOBankingRates polled Americans about their retirement fears in 2017. However, a slightly higher percentage of people last year than this year said they are concerned about being able to afford their lifestyle in retirement — 25 percent versus 21.78 percent. Learn where your nest egg will stretch the furthest.

A good way to overcome that fear — and to help ensure that you’ll actually be able to retire — is to dial back spending while you’re working so you get used to living on less. There are major upsides to downsizing.  “The biggest thing you can do to be sure you can retire is to learn to live on very little and put away as much as you can into savings and retirement,” Dwyer said. “I find sometimes that those who make the most money are used to living a more lavish lifestyle, and a luxury, once enjoyed, quickly becomes a necessity.”

More importantly, make sure you have a retirement plan, Bishop said. At the least, estimate your retirement expenses to see if you’ll have enough income in retirement from savings, a pension or Social Security to cover those costs. Check with your employer to see if it offers any financial planning tools or advice as part of your benefits. OnTrajectory has a calculator you can use to help you get started and a paid plan that offers more features to help you chart your financial future.

Click through to learn how to find a financial advisor to get more dedicated retirement planning help.

More on Retirement Planning

Methodology: This GOBankingRates survey posed the question, “Of the following, what do you fear the most about retirement?” to 5,013 people among all 50 states and Washington, DC. Respondents could select one of six options: “never being able to retire,” “not being able to afford my lifestyle,” “not being able to afford healthcare costs,” “suffering from boredom,” “losing access to Social Security benefits” and “not having anyone to enjoy retirement with.” Responses were collected through a Google Consumer Survey conducted from April 25-April 29, 2018, and responses are representative of the U.S. online population. The survey has a margin of error of 4.30 percent.

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