What Do People Fear Most About Their Retirement?
Retirement is a goal to which many people look with excitement and anticipation; a well-deserved, life-long break from work, with endless free time and the freedom to do as you please. But retirement also poses a number of concerns and fears for many. The advent of the novel coronavirus in 2020 dashed the hopes of many due to retire, with one in five 60-65s under the impression they will need to delay their retirement due to money concerns.
What are the biggest fears held by those approaching retirement, and why do matters of finance have such an impact with regard to delaying retirement?
Rising Medical Expenses
Up until retirement age, medical expenses are not necessarily a concern; between a national healthcare service free at the point of use, and private health insurance often offered alongside employment contracts, our healthcare needs are usually covered. But after employment, things can look a little different. The NHS remains free, but the number of medical complaints you suffer is likely to increase – and there may well come a point, in time, where you require care and assistance even in your own home. These can present additional costs, which can be hard to budget for – and present a major concern for many of the aging population.
Outlasting Your Savings
Retirement worries regarding money do not stop with concerns over covering healthcare needs; a recent study showed that more than half of 45-60-year-olds were worried they would not be able to sustain an adequate standard of living in retirement. Pensions are often not enough for a retiree to live on alone, having been decimated by a higher cost of living and rising rate of inflation; and many people do not think to save ahead of their retirement; the same report indicated that nearly a quarter of the self-employed population had not considered saving for their retirement.
In the face of this financial worry, many prospective retirees are looking at solutions to release equity in assets – namely, the home. Equity release is a loan secured against your home and paid off on the home’s eventual sale, enabling you to access and make the most of money otherwise locked up in your property. It is becoming an increasingly popular option for those in retirement, as a way to enjoy it without fear of outliving their bank balance.
Also read: Tax Tips For Retirees
Obsolescence and Loss of Purpose
Outside of financial concerns, another worrying factor for many is the eventual loss of purpose that comes with leaving work, especially where your job was one you particularly loved. Life can seem to start passing you by very quickly, and without active engagement in your retirement you can find yourself very quickly receding from public life. Retirement requires emotional preparation, to make the most of your time and to ensure you don’t sink into inaction and poor mental health; ensuring you have a plan for your retirement, and the activities you intend to carry out in your newly-found free time can go a long way to keeping you mentally limber, and feeling purposeful.