What are your biggest retirement worries? I thought for many the biggest fear would be never having the ability to retire. Merrill Lynch and Age wave conducted a new study on retirement savings and found that 1/3 of all adults have $0 in retirement savings. None, they haven’t even begun the journey. Another 23% had less than $10,000 saved. No wonder the hope of retirement is a fading dream for many and also why I thought that would be the biggest concern. I was wrong, not being to retire wasn’t the biggest concern.
Number one on the list was you or a loved one having a costly health issue. I knew this would make the list but not necessarily at number one. The cost of healthcare and health insurance in this nation has exploded over the last decade. The cost increases we’ve seen in the health industry has been out of control and there is no end in sight. It is no wonder this is a concern for many.
The second biggest concern surprised me, inflation. Sometimes called the hidden tax it is one of the most insidious forms of erosion on our wealth there is. Ever since we left the gold standard for good in the 70s, prices on everything has gone up significantly. If you don’t believe me ask your grandparents and be prepared to be shocked. Also, the recent stretch of chronically low interest rates has made this problem worse. It is has become harder to outpace or even keep up with inflation through safer investments.
The next three concerns are similar and unlike the first two, they are completely under your control. Not having enough money to do what I want to do, outliving my savings and living on a fixed income. You can easily prepare for these three concerns by simply saving more money. It really is that simple. Spend less, save more and stay out of debt. I believe our consumerist society has created its own prison. We run around working hard for thirty, forty or fifty years and then have nothing to show for it. It doesn’t have to be this way nor should it be this way.
We have to focus on what we can control. The most glaring thing we can control is our savings rate. There is no reason why so many should be struggling in retirement. We have created an insanely prosperous nation and it is about time that we focus more on taking care of ourselves and our loved ones and less on what the Joneses are doing. There are plenty of things we can’t control in this life but what we can do we should do. This study shows that we aren’t saving enough based off our fears and our actions. Simply put, it has to change.