It’s almost time for Halloween and getting a good fright seems to be fun for most people. However, as long as retirees are concerned, forget ghosts and goblins as there are few other things that may scare you to death. Instead of fretting about what may be sneaking under the couch or in the shadows of your closet, seniors seem to toss and turn throughout the night for some different reasons altogether. Brian Nelson Ford, a financial executive at an eminent firm said that over 85% of baby boomers nurture some kind of financial fear. Let’s take a look at the things which fear the retirees and how they can stop these from keeping them awake at night.
Fear #1: Burgeoning Medial expenses
Fix: Emergency fund and adequate insurance coverage
The biggest fear which makes baby boomers spend sleepless nights is their sprouting medical expenses. Survey reveals 22.8% of 890 baby boomers share the same financial hear of rising medical emergencies and its consequential costs. As per a 2016 survey directed by the American Institute of CPAs, medical concern was their ultimate biggest concern. 25% of the respondents said that their biggest fear was dementia, serious illnesses and reduced capacity.
To oust this kind of fear and tension, retirees need to have adequate insurance coverage, something that goes beyond Medicare. There are few medical emergencies like stroke which lead to the need for long term care (which is often not provided by Medicare). Hence they can convert a current life insurance policy to one that comprises of long term coverage. Medical debt can be eliminated through various debt relief options but it is better to remain safe than sorry.
Fear #2: Falling short of funds
Fix: Proper predictions and cautious spending
Thanks to modern medications, mortality rates are increasing and people are living for a longer time. But this in turn poses a challenge to the retirees as they worry about outliving their money. This is a fear that is sometimes even more than the fear of dying. This is a fear which is difficult to subdue as there’s practically no way of knowing how long someone is going to live. Hence, to be safe, financial advisors suggest people to plan for a longer life.
Even with proper future predictions, seniors need to be prepared for spurring medical expenses as the longer they live, the more vulnerable they will become to physical disabilities. Seniors have to beat the odds of the occasional economic downturn which bar them from saving money.
Fear #3: Economic Recession
Fix: Multiple sources of income and an assorted portfolio
An unanticipated economic event or a recession is registered as the biggest financial fear for 25% of baby boomers. This is a panic which strikes even the seniors who have been diligently saving money for their retirement. A recession frightens them as they know that they have done their best to safeguard themselves but yet something that they can’t control may derail all their dreams and hopes.
The experts therefore suggest seniors to have at least 2 years’ worth of money saved in low-volatility accounts. They could be money market accounts or even conventional savings accounts. Money can be pulled off from such accounts while retirees ride out of recession and wait for balances to rebound in their retirement accounts.
Once you grow up, you no longer worry about goblins, spooks and ghosts but that doesn’t mean that you’ll never be scared. Follow the above mentioned fixes to avoid such financial nightmares to cause harm to your life.