Recent results from the poll titled, The Impact of the Pandemic on Retiree Confidence released on September 9, 2021 by Kiplinger's Personal Finance magazine and industry-leading digital wealth management company, Personal Capital, clearly expose the biggest money fears retirees have in this pandemic-impacted economy. I believe these concerns equally apply to all adults. In this post, we will discuss the poll’s key findings.
The poll results indicate five major concerns retirees are dealing with:
62% - That we will have a recession in the next year or two. Over the past 15 years, Americans have lived through two severe recessions. Survey respondents worry that another downturn might be around the corner.
67% - The financial strength of Medicare. Recent reports have communicated that Medicare’s financial situation is not the best and there are reforms that need to be made.
71% - The financial strength of Social Security. Social Security also faces major financial hurdles, and nearly three-quarters of retirees worry about the federal retirement program’s financial health and possible reductions in future benefits.
74% - The cost of health care. This is a self-explanatory result. With projections indicating that senior couples may need up to $300,000 saved to pay retirement medical costs you can understand why.
77% - Rising inflation. After decades of tame inflation, retirees now face the prospect of much higher prices. Many experts believe the recent trend of rising costs is temporary. As a consumer you cannot control where prices go, but you do have the power make changes in your spending, investing and earning habits to offset its impact.
As you can see from the above, these older individuals are seeing spiking consumer prices, an uncertain economy and volatile stock market, and have worries about the financial future of government safety net programs.
Another key finding for me is to look at the money plans of these individuals over the next 12 months. Among their top financial goals are:
1 in 3 say the pandemic has convinced them they will need a bigger nest egg for retirement
Among near-retirees who plan to retire within five years, more than 4 out of 10 (41%) say they have begun saving more, and nearly one-quarter (24%) are delaying their retirement date.
Seventy-one percent (71%) say they spent less during the pandemic, especially on entertainment (57%) and transportation (43%)
1 in 3 say their overall living expenses increased, with 24% spending more on medical expenses and 17% offering more financial support to family members
Summary
The pandemic has financially impacted Americans of all ages. It has caused changes in the financial concerns of households along their spending and saving habits. For the foreseeable future, we all are going to need to be extra vigilant with our money and save more to cover the future unknowns in our lives. Money is more precious than it has been in decades.
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