1/3 of older Americans believe they will outlive their savings

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For too many older Americans, the concept of an enjoyable and relaxing retirement seems to be slipping away. According to a recent survey, one-third of Americans aged fifty and above believe that they will outlive their savings. Approximately the same amount (34%) of older Americans who had not yet retired believes they are extremely or very financially prepared for their retirement. Many other older Americans are in the middle ground — somewhat prepared and confident, yet anxious about their retirement years.

Whether you are already retired or nearing that point, the survey shows significant anxiety about retirement finances within your age group.

The survey, funded by the Alfred P. Sloan Foundation and conducted by the AP-NORC Center for Public Affairs Research, shows that there is serious concern among respondents about how long retirement money will truly last and what expenses they may face in retirement. That is true even through most seniors report multiple sources of retirement income — 81% have two or more sources and 60% have three or more.

See when most seniors are retiring across the country:

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Average retirement age in every state
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Average retirement age in every state

Alabama - Age 62

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Alaska - Age 65

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Arizona - Age 63

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Arkansas - Age 62

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California - Age 64

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Colorado - Age 64

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Delaware - Age 62

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Connecticut - Age 64

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Florida - Age 63

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Georgia - Age 62

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Hawaii - Age 63

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Idaho - Age 63

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Illinois - Age 63

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Indiana - Age 63

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Iowa - Age 64

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Kansas - Age 65

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Kentucky - Age 62

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Louisiana - Age 63

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Maine - Age 64

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Maryland - Age 64

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Massachusetts - Age 64

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Michigan - Age 62

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Minnesota - Age 63

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Mississippi - Age 63

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Missouri - Age 63

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Montana - Age 63

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Nebraska - Age 65

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Nevada - Age 63

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New Hampshire - Age 65

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New Jersey - Age 65

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New Mexico - Age 63

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New York - Age 64

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North Carolina - Age 63

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North Dakota - Age 63

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Ohio - Age 63

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Oklahoma - Age 63

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Oregon - Age 63

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Pennsylvania - Age 63

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Rhode Island - Age 64

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South Carolina - Age 62

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South Dakota - Age 63

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Tennessee - Age 63

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Texas - Age 64

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Utah - Age 65

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Vermont - Age 65

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Virginia - Age 63

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Washington - Age 64

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West Virginia - Age 62

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Wisconsin - Age 63

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Wyoming - Age 65

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Unexpected medical expenses are one of the largest sources of expense concerns, with exactly half of respondents reporting anxiety about being able to pay them.

It should come as no surprise that older Americans with lower incomes are more anxious about retirement, but anxiety crosses the income lines. 58% of survey respondents with household incomes below $50,000 report anxiety about their retirement nest egg, but so do 40% of respondents with incomes greater than $100,000.

While there are concerns about retirement savings, it's not for lack of trying to save. Approximately 67% of older Americans that are still working are placing some of their paycheck aside for retirement — but as with anxiety, the responses shift with total income. An overwhelming majority (90%) of those with $100,000 or more in income are saving for retirement, while just under half (47%) of those earning below $50,000 are doing so.

Even with multiple sources of retirement income, Social Securityplays an important role in many retirement plans. For 44% of those aged 50 or above, it is expected to be the largest component of income. A majority (54%) of respondents with incomes below $50,000 report that they will rely heavily on Social Security.

Unfortunately, 43% of respondents either plan to start receiving Social Security benefitsbefore their full retirement age (FRA) or have already done so — reducing those critical benefits by anywhere from 6% to 30%. If they are having trouble getting by in the near-retirement years, seniors must make a critical decision. Do they struggle with little margin for error in the early years, or do they collect early and run the risk of outliving their funds? Given the number of early claims, it is no surprise many seniors expect to outlive their savings.

Income sources outside of Social Security are not bringing sufficient security, either. Only around 33% of seniors with retirement investments are very confident or extremely confident that their funds are being managed well — and that is during a prolonged bull market. The lack of confidence is approximately equal whether the accounts are self-managed or managed by others (professional or not).

Are you one of those anxious about retirement funds and expecting to outlive your savings? Feel better through taking action. It's never too late to trim expenses, divert more of your income toward savings, and invest your savings wisely in a suitably diverse portfolio. Proper planning and action now could prevent financial anxiety when you retire.

Let the free MoneyTips Retirement Planner help you calculate when you can retire without jeopardizing your lifestyle.

Originally Posted at: http://www.moneytips.com/one-third-of-older-americans-believe-they-will-outlive-their-savings/720

Now check out some facts about retirement life you may not know:

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10 Surprising Facts About Retirement Life
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10 Surprising Facts About Retirement Life
After decades of accumulating enough money to retire, it can be psychologically and emotionally challenging to spend down that money and watch your nest egg get smaller each year. "They are going to feel like they spent a lifetime accumulating this pile, and the idea of spending this down is just repulsive to them," says Alicia Munnell, director of the Center for Retirement Research at Boston College and co-author of "Falling Short: The Coming Retirement Crisis and What to Do About It." "For anyone who is retiring, I would give them permission to spend their money," she says.
Saving enough to retire is not your final goal. You should also develop a plan to make that money last the rest of your life. "You need to understand how you can minimize your risk in the portfolio, but you also need a component of that strategy that gives you growth because you need to stay ahead of inflation and taxes," says Laura Mattia, a certified financial planner and wealth management principal for Baron Financial Group in Fair Lawn, New Jersey.
Social Security is a significant source of income for most retirees. Almost all retirees (86 percent) receive income from Social Security, and Social Security payments make up at least half of the retirement income of 65 percent of retirees and comprise 90 percent of retirement income for 36 percent of retirees. "Most seniors do not have much income other than Social Security," says Nancy Altman, co-director of the Strengthen Social Security coalition and co-author of "Social Security Works! Why Social Security Isn't Going Broke and How Expanding It Will Help Us All." The average monthly retirement benefit was $1,282 in December 2014.
High medical care bills don't go away once you qualify for Medicare. Although Medicare covers a large amount of the medical treatments older people need, there are several popular services that it doesn't. For example, Medicare won't cover routine eye exams, eyeglass, dental care or hearing aids. And Medicare only covers up to 100 days in a nursing home. Retirees who require additional long-term care will need to find another way to pay for it. And while many preventive care services are covered by Medicare with no cost-sharing requirements, if something concerning is found, additional tests and procedures will be considered diagnostic, and copays and coinsurance are likely to apply. "You really need to understand what health benefits you can receive from Medicare and check how it will cover any ongoing health issues," says Christopher Rhim, a certified financial planner for Green View Advisors in Norwich, Vermont.
Without a job to go to every day, you could find yourself spending an increasing amount of time alone. Some 44 percent of Americans ages 65 and older live alone, according to U.S. Census Bureau data. Unless you sign up for a volunteer position or make an effort to socialize on a regular basis, you could become bored and lonely.
If you outlive your spouse or divorce, you might find yourself single again in retirement. While just over half (55 percent) of Americans age 65 and older are married, the rest are widowed (28 percent), divorced (12 percent), separated (1 percent) or never married (5 percent), according to census data. Some of these single seniors begin meeting new people and dating. There are a variety of online dating services that cater to people over 50.
As attractive as it sounds to move to the Sunbelt, most retirees don't relocate for retirement. Only 5.7 percent of Americans age 65 and older moved to a new residence between 2009 and 2013, and the people who do move most often relocate to the same state and even the same county, the Census Bureau found. Only 1 percent of retirees moved to a new state, and just 0.3 percent went overseas. Relocating to a new community in retirement often means leaving behind family and a support system that can be difficult to rebuild in a new place.
While the act of aging is an expected part of retirement, the loss of independence typically isn't as welcome. There may come a time when you can't drive, shovel your own walkway or climb on a chair to change a light bulb. You may even eventually need help with meals and bathing. Although the beginning of retirement is often full of fun and adventures, it's also a good time to make contingency plans for later down the road when you might not be able to care for yourself.
Retirees spend over half of their leisure time watching TV. Seniors ages 65 to 74 tune in for 3.92 hours on weekdays, and those 75 and older watch TV for an average of 4.15 hours each day, according to the 2013 American Time Use Survey by the Bureau of Labor Statistics.
Compared to the overall population, retirees ages 65 to 74 spend extra time lingering over meals, working on home improvement or garden projects and shopping, the American Time Use Survey found. Retirees also spend more time reading, relaxing and volunteering than younger folks.
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