Historically, most people didn’t even think about their retirement until they were practically knocking on its door. But then again, there was a time when most people earned a living working the land, and the chances were pretty good that their children would assume their duties as they aged. There was also a time, more recently, when pensions dominated professionals’ visions of retirement, rather than the 401Ks of today, and the cost of living was far less. Not to mention, the cost of health insurance….
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Retirement has a long and interesting history – one that’s changed and changed again alongside our ever-evolving workplaces. Today, it seems folks are more worried than ever before about their retirement. But, who exactly feels the most concerned is a little surprising. Let’s take a closer look.
1. Millennials and Gen Xers are more worried than Baby Boomers about their retirement.
Charrise Jones of USA Today wrote an article earlier this month about a report released by Bank of America and Merrill Edge on the state of our retirement anxiety and planning. The study found that the younger generations are more concerned about their retirement than Baby Boomers.
Seventy-four percent of Gen Xers and 67 percent of millennials believe they will be financially stressed during retirement, according to the survey of over 1,000 Americans. In contrast, 59 percent of current retirees report that they aren’t stressed about finances because of how they planned for this stage of life.
2. It might be, partially, a fear of the unknown.
It’s harder to feel prepared when you don’t know exactly what you’re preparing for. Those who are already retired know what they need to spend each month, and they know how much they have to work with. But, when attempting to project forward, the prospect of setting enough aside can be daunting – especially without knowing how much you’ll need to get by.
Aron Levine, head of Merrill Edge at Bank of America said, “The retirees now know what their costs are in retirement. They know what they’re spending in the near term, their health care costs, so it’s a little easier to understand and look out over the next few years vs Gen X and Millennials who are looking 20 to 25 years out in the future. The unknown, and everything they see and read, suggests a very stressful situation.”
3. Heathcare costs scare everyone.
The rising cost of healthcare is terrifying to a lot of people. Sixty-five percent of those surveyed said that they expected medical costs to strain their finances in retirement. A lack of social security benefits was also a concern. Thirty-eight percent of respondents report that would stress their budgets.
With uncertainty rising, you’d think that savings plans fly off the shelves. Yet, only 24 percent of non-retirees report working on retirement goals with an advisor (as compared with 38 percent of retirees who did the same before quitting work). However, 43 percent of millennials did admit that they’re counting on some financial support from loved ones during retirement – so, for many, that’s part of the plan. In fact, 61 percent of working people say that they are making planning for their financial futures a priority.
Perhaps all the concern will pay off in the end. In the meantime, planning for an uncertain future can be tricky, but well worth it – and it could help to ease our minds along the way as well.
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