Aging Options

Three Big Money Fears Retirees Face – and How to Meet Them Head-on

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Do you have financial fears as you face retirement? If so, you’re not alone.

We just ran across this recent article on the US News website, and while it may have a Halloween theme (with the title “3 Things That Spook Retirees”) it’s no joke. It turns out, based on a recent survey conducted by Sun Trust Bank, that 82% of baby boomers have some type of financial fear. It may not be “things that go bump in the night” that keep you awake – it may be the Dow Jones or the status of Social Security or worries about health care costs that have you tossing and turning.

At AgingOptions, we are firm believers that the way to fight fear – especially fear about money and retirement – is with honest information and a rock-solid plan. So with that in mind let’s take a look at what this US News article says are the three biggest financial worries retirees fear most. This is according to financial experts at Sun Trust and others quoted by US News. See if you agree, not only with what boomers are scared of, but what these experts recommend as the solution.

At the top of the “worry list,” the number one fear of baby boomers looking ahead to retirement is medical expenses. In its survey of nearly 900 baby boomers, Sun Trust discovered that more than 20% reported their biggest financial fear to be a medical emergency and the resulting out of pocket costs. In a separate but similar study conducted by the American Institute of CPA’s, even more respondents – nearly one-quarter – listed their number one fear as the cost of dealing with serious illness or reduced physical capacity.

So what’s the fix for this fear? You need a combination of insurance plus savings. The US News article suggests that “retirees need to be fully insured, and that goes beyond simply having Medicare.” Along with medical insurance, adds US News, “retirees should have an emergency fund to pay for unexpected medical bills.” The more savings you have, the less you tend to worry. Speaking of insurance, right now is a critical time to be evaluating your Medicare coverage since open enrollment continues through December 7th. Of course, Medicare won’t cover most long-term care triggered by serious medical conditions such as stroke or dementia, so it’s important to explore all your options, including long-term care insurance, Medicaid, VA benefits or, for those who can afford it, new combination policies linking long-term care coverage with life insurance. If you’ll contact us at AgingOptions we can review your situation with you and help determine which options are best.

The second big fear, also shared by about one-fifth of respondents, is the fear of recession. In the words of one Sun Trust planner, “A recession scares [retirees] because they’ve done the right thing, but something they can’t control could derail them.” The pain triggered by the recent recession of 2007-2008 isn’t far from the minds of most boomers, and they wonder if that might happen again during their retirement years. While we can’t control unforeseen economic events, says the article, we can prepare for them by saving and diversifying. One recommendation from US News is to have two years’ worth of expenses in “low-volatility accounts” such as money market accounts or traditional savings accounts. Another, maybe even better idea we encourage you to explore is to establish a reverse mortgage line of credit, which allows you to give your stock-based funds time to recover during a recession while you can access your home equity to augment Social Security. Again, we here at AgingOptions can advise you on these important topics by referring you to trusted advisors who will give you honest and objective advice.

The third fear on the list is closely related to the second: running out of money. Many retirees ask, “What if I outlive my resources?” One advisor quoted in the US News article said some of his clients “fear that more than death.” We understand. Our goal is to help our clients protect their assets in retirement and avoid becoming a burden to their loved ones, and the best way to make your money last as long as you do is to plan ahead and spend wisely. Too many people become careless in the first few years of their retirement, spending too lavishly. Retirement is a time for caution and care: make a good plan and stick with it.

As always we want to remind you that there’s far more to a good retirement plan than finances. As we emphasize with our clients and radio listeners, every aspect of a solid retirement plan – which we call a LifePlan – is interconnected with the others. Your finances, your medical coverage, your legal affairs, your housing choices and your family communication all work together to form a comprehensive blueprint for a secure vibrant retirement. You don’t have to face the future with fear – not with a fully-developed LifePlan as your guide. There’s a quick and simple way to find out more: sign up today for one of our free LifePlanning Seminars, which we offer in locations throughout the region. We guarantee you’ll find these information-packed sessions both helpful and eye-opening – and if you choose we’ll gladly follow-up with you for a more detailed consultation. Click on the Upcoming Events tab for dates and times, then register online or call our office and we can assist you. It will be our pleasure to work with you.

(originally reported at

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