Healthcare costs top obstacle to retirement security – US
U.S. life insurance company Northwestern Mutual (NM) has released its 2017 Planning & Progress Study, which pinpoints healthcare costs as the biggest obstacle to attaining financial security in retirement for Americans.
In fact, there has been a significant increase in the number of Americans citing healthcare costs as their chief concerns (from 45% in 2016 to 58% in 2017). Lack of savings (44%) and uncertainty over Social Security (31%) followed to round out the top three.
Findings indicate that concerns about the continued existence of Social Security as a retirement safety net is increasingly weighing on Americans. For the first time this year, Social Security fears edged out lack of planning to become the third-cited obstacle to financial security in retirement. Additionally:
- Only 2 in 10 (20%) Americans believe it’s “extremely likely” that Social Security will be available when they retire
- Women are the least optimistic, with nearly 6 in 10 (59%) saying Social Security is “not at all likely”, or “somewhat likely”, to exist compared to 52% of men. This is notable given that 4 in 10 women expect to rely on Social Security as their “only” or “primary” source of retirement income.
Despite growing anxiety about retirement costs, the future availability of Social Security, and insufficient retirement savings, fewer Americans said there is some chance of outliving their savings, down eight percentage points (from 69% to 62%) in 2016. Yet further data contradicts this optimistic outlook:
- 7 in 10 Americans experience some level of anxiety around outliving their retirement savings
- Less than half (47%) of Americans feel very financially secure, while nearly 2 in 10 expect to feel less secure over the next 12 months
- Under one third (31%) believe they excel at contributing to retirement savings
- 4 in 10 (43%) believe there is more than a 25% chance of outliving their savings entirely
According to Rebekah Barsch, vice president of planning for Northwest Mutual, longer lifespans, government debate around the future of healthcare and Social Security, and continued economic uncertainty add unpredictability to the challenges of retirement planning.