Money can be a scary thing, that is, if you don’t have enough of it. If you’re in this fright zone, then there’s a lot you can do about it.
Here are some of the things that scare people the most involving money, according to the Secure Retirement Institute:
- 1 in 7 U.S. retirees (ages 65+) live in poverty.
- 44% of workers who aren’t saving for retirement say they cannot afford to.
- Over half (53%) of Americans don’t believe their savings and investments will last if they live to be 90 years old.
- 30% of retirees have mortgage debt—almost double from 1989.
- About 80% of older adults have at least one chronic disease, and 68% have at least two.
- Social Security is the primary source of income for retirees but the Social Security Trust Fund is expected to be depleted in 15 years.
It’s startling to see that nearly 80 million Americans would go so far as to say their finances have reached ‘horror show’ status, but it shouldn’t be too surprising. Financial literacy levels are also far too low. And more importantly, a lot of people are indeed struggling financially.
How do you avoid being scared out of your wits? You need to look at your own situation first. If you’re not saving, how can you save automatically through a bank account of 401(k) plan?
Then, look at your debts. If you’re racking up credit-card bills or payday loans, pay those off first. That’s the most expensive in terms of interest payments. At least mortgage debt is still partially deductible on your federal tax return.
Focus on healthcare coverage as well. Can you find a plan that covers more with less out-of-pocket exposure? Have you funded a Health Savings Account at work that will cover these items? It’s tax-free money, so it’s a great deal.
Yet another savings strategy is that you can wait until 70 to collect Social Security. That will maximize your benefit and allow you more time to save.