Bank of America 90-Day Financial Fitness Challenge: Retirement – Habit #6

The top four  retirement concerns  — and how to handle them

Retirement has the potential to be a relaxing and fulfilling stage of life. As with any major change, though, it presents a new set of challenges that may cause anxiety. How do you manage health care costs? How do you keep from outliving your money? What if you still have debt?

By laying some financial groundwork now, you can ensure a smooth transition to retirement. Following are the four biggest financial concerns about retirement, according to a 2015 survey by, and how to get a handle on them.

Paying for health care

Health care costs are the top retirement concern for Americans. According to the survey, 28 percent of people are worried their medical expenses will be too high. But fewer than 15 percent of those nearing retirement age have estimated how much they will spend on health care in retirement, according to a 2014 survey by Merrill Lynch and Age Wave.

What to do about it:

Unanticipated medical expenses can derail years of retirement preparation. Merrill Edge provides smart ways to plan now for the cost of health care later.

Saving enough money

Today, nearly 25 percent of all 65-year-olds will live to age 90, according to the Social Security Administration, and almost as many worry that they will outlive their money, according to the Bankrate survey.

What to do about it:

You may be able to reduce retirement anxiety by estimating how much you need to save to cover a long retirement. To find out if you’re on track, use the Personal Retirement Calculator at Merrill Edge. Then look for ways to boost savings, including taking advantage of catch-up contributions to retirement accounts (if you haven’t already) and adjusting your asset allocation to meet your changing circumstances. You can read more retirement saving tips from Merrill Edge.

Maintaining an income stream

Eighteen percent of Americans are worried that they won’t be able to afford daily expenses in retirement, according to the Bankrate survey, and they’re concerned that Social Security income either won’t be available or won’t cover enough of their expenses.

What to do about it:

When it comes to income planning in retirement, keep in mind that working for even just a few more years may help you suspend drawing income from Social Security and savings while taking advantage of available pensions and benefits.

Having too much debt

More than one in ten Americans worry about having too much debt in retirement. In 2015, the average 65-year-old had more than $48,000 in debt, compared to less than $34,000 in 2003, according to data from the New York Fed Consumer Credit Panel. During this time frame, debt increased by about 60 percent for all borrowers between 50 and 80 years of age.

What to do about it:

There are different ways to tackle debt and many strategies for paying it off. If debt feels overwhelming, a credit counselor might be able to help.

Retirement can be about having the time to enjoy the things you have always wanted to do. Put your retirement concerns at ease by planning ahead and laying a good foundation for your financial security.


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