Many Americans fear going broke in retirement

Even high net-worth individuals are stressed by the prospect of running out of money in retirement.

Whether making a modest income or abounding in wealth, living below one's means is what's recommended. But with reality and the ideal being two different things, it's safe to say that this practice isn't followed as strictly as it ought to be. It's part of the reason why many Americans are worried that they won't be able to finance their retirement once they're of age, a newly released poll suggests.

4 in 10 cite money management as top retirement fear
In a recent survey of financial planners that asked what their clients No. 1 concern was when it comes to retirement preparation, 41 percent said their chief source of anxiety was running out of money, the American Institute of Certified Public Accountants reported from its poll. In a distant second on their list of concerns was maintaining their current style of living at 29 percent, followed by absorbing health care costs increases at 11 percent.

One might expect that financial capacity would be a source of stress for those who aren't making much in terms of income. However, this fear was also found among high net-worth individuals as well.

Susan Tillery, chair of the AICPA's credential committee, noted that what's also playing into Americans' retirement worries is the average lifespan for individuals today, which has risen rather significantly from as recently as the 1950s and 1960s.

"Since people are living longer, not having enough money in retirement is a legitimate concern," Tillery explained. "Financial planners should have those difficult conversations with clients about planning for unexpected events and curbing spending if necessary."

She added that by working in consultation with clients to develop a comprehensive retirement plan of action, financial professionals can help their clients become more confident in their personal economic preparation for the post-working world.

Also playing into clients' fears is the unknown and how they'll be able to accommodate it. For example, the AICPA survey revealed that in the first 10 years of retirement, 52 percent worried about their investments declining in value. Nearly 1 in 4 were concerned about how they would pay for diseases and health struggles often associated with age-related decline, such as dementia and diminished mobility. Eleven percent fretted about being able to financially assist their offspring particularly their children and grandchildren.


The long-term effects of diminished capacity become clearer as we grow older. The long-term effects of diminished capacity become clearer as we grow older.

Health worries surge after 10 years of retirement
Perhaps unsurprisingly, the older Americans get, the more concerned they become about their physical well-being and how they'll be able to compensate. This was the case among the poll's respondents as well, as after the first decade of retirement, health replaced investments as their top anxiety at 42 percent, with investments in a distant second at 28 percent. Nearly 1 in 5 - 19 percent - fretted about adjusting to the living conditions of nursing facilities.

All things being equal, most individuals would much rather age in place, staying within their own homes for the rest of their lives. However, approximately 3 in 4 baby boomers are not prepared for the changes that have to be accounted for, according to a separate survey performed by digital home services firm HomeAdvisor.

"It is understandable that clients are increasingly worried about the financial implications of their health as they age," Tillery acknowledged. "Financial planners can help alleviate these concerns by having frank discussions with their clients and addressing their financial fears."

She added that making decisions now about what may happen then can help ease clients' minds and give them the sense of assurance and peace of mind that they're ready for whatever life throws at them as they grow older.

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