Americans Fear Outliving Savings, but Fail to Act

A retirement plan can drive away the fear and improve financial outlook.

Each week, Consolidated Credit searches for financial research that can help you deal with your debt and budget. This week…

The interesting study

To find out people’s attitudes and behaviors towards money; to gain insight on their priorities and how they plan on meeting them, Northwestern Mutual polled 5,474 American adults aged 18 and older.

The big result

Seventy-nine percent of Americans say insufficient savings and lack of confidence in the viability of Social Security as they head into retirement are their biggest concern.

  • 31 percent of Americans believe they might outlive their retirement savings
  • Yet, more than half (52 percent) are doing nothing to make sure their savings last through retirement
  • Working Americans expect to retire at age 68 – three years beyond the traditional retirement age of 65 – due to lack of savings and lack of confidence that social security benefits will be around when they get there.
  • More than one in ten think there is a 100 percent chance their savings will run out someday and one in four Americans don’t know whether their savings will last or not.
  • Adults 69 and older say their top three financial fears are outliving their savings, an unplanned financial emergency and unplanned medical expenses.

 

The fascinating details

Americans are aware of the financial problems they may face in retirement but are doing nothing to prevent them. Why?

Turns out the most crippling emotion of all is the culprit – fear. Seventy-nine percent of Americans say they are ‘uncomfortable taking financial risks and prefer lower risk, stable choices.’Just 21 percent say they prefer taking calculated risks in the pursuit of higher returns.

The fears of older American adults running out of money in retirement are real. A 2013 study found Boomers fear outliving their retirement assets more than they do dying and fear that social security will run out by the time they reach full retirement.  Doing nothing to overcome those fears and to prepare for a successful retirement is concerning.

“Fear can lead to paralysis, but ignoring the problem doesn’t make it go away,” Steve Sperka, vice president, Northwestern Mutual says. “This should all be addressed in a financial plan that sees beyond the short-term.”

What you can do

“Be proactive,” Consolidated Credit’s president Gary Herman says. “Pay down your debt, pay down your mortgage, and pursue investment opportunities both low and high risk so all of your retirement money isn’t in risky stock options. Take advantage of employer 401 (k) plans, implement saving strategies that will free up cash in your budget to boost your monthly savings. Having fear and doing nothing about it does not magically make you retirement ready. Enlist the help of a financial professional to devise a strategy for this significant phase of your life and stick to it the best you can.”

Take a look at this 8 secrets to a successful retirement infographic and learn from the mistakes, concerns and observations of those who have already retired. Aspire to retire debt free. If credit card debt is delaying your financial goals a certified credit counselor may be able to help. To reach your goals, dial or request help online now for a free Debt and Budget Analysis.