Other than health concerns, the leading cause of an unhappy retirement is money anxiety. If you don’t have enough of it, retirement will be difficult.
If you have time to plan and save, you’ll have plenty of opportunities to set aside the cash you need. Fully fund your 401(k), Roth and Health Savings Accounts if you can.
There’s one major money issue that repeatedly trips up retirees: Health care expenses. Although Medicare covers most major expenses, it doesn’t cover everything. And long-term care such as nursing homes and assisted living aren’t covered at all.
According to a survey by T. Rowe Price, other than outliving your money, healthcare costs topped the list of concerns for retirement savers. Here’s what the company found:
— Health and the cost of health care are the top concerns leading into retirement, followed closely by assets lasting in retirement.Ā Nearly 70 percent of retirees feel somewhat or very concerned about both their health and the cost of health care heading into retirement, followed by 65 percent of retirees reporting concerns about their assets lasting.
— The top three spending concerns in retirement all relate to health care.Ā Seventy-two percent say long-term care services, like a nursing home, is the top spending concern in retirement, followed by health insurance premiums (64 percent) and out-of-pocket health care expenses (64 percent).
— Despite the concern for the cost of health care, a majority of retirees have enough money to pay for it.Ā Seventy-seven percent of retirees say that they have enough money to pay for health care and this belief increases with the number of years spent in retirement: 71 percent of recent retirees say they have enough money for health care, compared to 81 percent of retirees 11 years or more into retirement.
Conversely, only 46 percent of current workers believe they will have enough money to pay for health care in retirement.
How do you avoid money issues in retirement? Plan and save. Here’s what you can do:
Planning on these three items — in addition to robust saving overall — will help allay future fears in retirement. Many employers will help you plan. If not, you can consult an array of tools online.