Younger Workers' Biggest Retirement Worry: All of the Above

Younger Workers' Retirement WorriesWhat has young and middle-aged workers most worried about their retirement prospects? Essentially, everything, according to a recent survey from T. Rowe Price (TROW) and Harris Interactive.

The survey's results show a wide array of frets people have about their financial futures -- everything from health care costs to tax rates to being able to afford to pay for a roof overhead.

The Biggest Fear: Health Care

The survey found that among investors age 21 to 50, more than three-quarters were concerned about health-care costs, and 58 percent pointed specifically to the costs of long-term care.

Citing a report from the Employee Benefits Research Institute, T. Rowe Price senior financial planner Stuart Ritter noted that "health care costs are the second-biggest expense for those aged 65 and older, behind housing, and it's the only spending category that steadily increases with age."

With Medicare projected to run out of money long before many of today's younger workers retire, trying to save enough to cover rising health-care costs is a huge burden.

Although health care worries are paramount, plenty of other concerns are on workers' minds.
More than half cited higher taxes, inflation, running out of money, housing, and Social Security as major potential problems. Just one in six expects to get full Social Security benefits, with more than a third believing that they'll get absolutely nothing from Social Security when they retire.

What You Can Do

Obviously, the ideal solution to retirement worries is to set as much money aside as you can. Ritter notes that Social Security's fragile condition "underscores the need for people to save at least 15 percent of their salary on their own, and consider Social Security to be only a complementary piece of their retirement income."

But saving more is just part of the equation.

Using protective strategies like long-term care insurance and immediate annuities can provide financial resources to fight rising health-care costs and reduce the risk of outliving your money. Using tax-favored accounts like IRAs and 401(k) plans can help you cut your current tax liability and manage taxes even after rates rise.

Retirement challenges aren't going away anytime soon. Planning for them is your best defense against those worries that keep you up at night.

For more on retirement and being smart with your money:

You can follow Motley Fool contributor Dan Caplinger on Twitter @DanCaplinger. He doesn't own shares of the stocks mentioned in this article.

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Health care is an obvious concern but future inflation should scare all generations. The world economy is pushing the dollar lower, hence higher prices in the USA especially if we continue to import most consumer goods from low wage countries and export more of our domestic jobs to Mexico and other third world countries. Most of us know who benefits from outsourcing. To further exacerbate this pending problem some people want to add millions of workers to our underemployed labor fource.

December 15 2013 at 5:07 PM Report abuse +1 rate up rate down Reply
Phil Collins

Wages have dropped as Good Jobs disappeared forever and a young person today will have to work until 65 or 66 at least and probably will have 4 to 5 different jobs throughout their careers as Companies close or are bought out.

December 15 2013 at 4:47 PM Report abuse rate up rate down Reply


December 15 2013 at 4:26 PM Report abuse rate up rate down Reply

The biggest fear for all ages should be the destruction of America by Obama.

December 15 2013 at 4:19 PM Report abuse rate up rate down Reply

So they didn't have the question on carrying the box to kiss the ass of those above you on the survey Eh? The Dung ladder to nowhere unless kin to someone or lackeys to those in power. You know in a Great Country if you had 5 people but could only afford 4 at 40 hours a week the 4 would give up 8 hours to hold the other one in a job. This country though? But let's look at the positive, hope him and the kids on the street starve quick so they don't suffer too long.

December 15 2013 at 12:12 PM Report abuse +1 rate up rate down Reply

This is so unreasonable, how can anyone save 15% of their salary to prepare for retirement when 100% plus is committed to keeping body and soul together? In an ideal society people wouldn't need SS when they retire because they would have the money. So to tell them that that is solution is a kind of "No Duh" moment. These articles assume everyone earns more then the mean and is just doesn't have the foresight to save, how insulting. SS is not fragile it is fully funded for many years, a quick fix would be to raise the ceiling on the eligible income and take a little tiny bit more. Save, of course, but the best thing you can do to assure you don't live in a hovel and eat rats in retirement is to advocate for the retention of the ACA, SS, and Medicare.

December 15 2013 at 9:30 AM Report abuse +3 rate up rate down Reply
Robert & Lisa

Plain and simple. We told you Obama was lying but instead of listening, you called us racists and bigists. Now look at what you did.

December 15 2013 at 7:15 AM Report abuse rate up rate down Reply
1 reply to Robert & Lisa's comment

Ha ha . . . oh yeah, you believe that McCain or Romney were going to help the 99% regain their place in the economy? You're not a student of history. Obama is another corporate stooge just like every president since Reagan.

December 15 2013 at 8:49 AM Report abuse -1 rate up rate down Reply
Robert & Lisa

Yes Obama's hope and change is the same old communist ideas. It never has worked for the people and never will. Got fooled again.

December 15 2013 at 7:12 AM Report abuse -1 rate up rate down Reply

There is something that you can do about long term health care costs. NOTHING. Simply don't go down that road. Don't fall for the trap of thinking that the medical world has the cure for old age and ultimate death. It does not. As opposed to what many will try to tell you, our ancestors lived about as long as we do... at least as far as the healthy active portion of our lives are. Most of the increase in longevity is actually due to the elimination of childhood diseases. Prior to WW1 about 1/2 of all children born died before the age of 10. About 1/3 of all women died in childbirth before the age of 30. Then there were diseases like small pox & cholera & typhoid. However, if you managed to survive all of that, you might not be young looking, but you were usually still active & working into your 60s & 70s. However, when that health crisis came... you often went quickly. Pneumonia was called the "old man's friend" because a person usually only lasted a few days or a week or so. Even now, that's what really kills most people in nursing homes. We have not lengthened the living years, we have lengthened the dying process. What our ancestors did not endure was months & years of lingering in increasingly frail bodies & poor health. Their old age was short. Our frail old age is long. Perhaps what people need to learn is to surrender to life... and death.

December 15 2013 at 1:25 AM Report abuse +3 rate up rate down Reply

You cannot "save" your way to security in old age, don't believ these articles and stories. If the healthcare costs don't get you the nursing home will. After a lifetime of saving all of your savings and also probably your home, stand a good chance of going to medical bills, a nursing home or other long term care facility. We have got to get rid of privatized healthcare as it continues at a rapid rate to impoverish folks who worked hard their entire lives and in their golden years will be forced to go broke. I know all of these facts because this scenario happened to my mom. The healthcare industry has a license to steal!!!!!!!

December 14 2013 at 11:24 PM Report abuse +4 rate up rate down Reply
1 reply to birds2nv's comment

To maximize profits you sell as much as you can, whether it is the right thing or not... after all, what does it matter if it kills the patient after you've taken all his cash?

December 15 2013 at 1:29 AM Report abuse +1 rate up rate down Reply