Retiring Soon? How to Beat Your Biggest Money Fears

Side profile of a mature couple using a calculator
Planning for how you'll make ends meet when you stop earning a paycheck remains a huge challenge for millions of Americans nearing retirement. Yet despite the many concerns that a recent study of 45- to 65-year-olds revealed, taking some simple steps can help you feel a lot more confident about your own retirement prospects.

A study from Jackson National Life and the center for Financial Insight solicited opinions from more than 500 people between the age of 45 and 65. Let's take a look at some of the most interesting findings the study revealed and some simple steps you can take to resolve the concerns they raise.

Can't Stop 'Til You Get Enough

It's not surprising that for those within 20 years of retirement, saving enough to retire was the primary financial concern. About three-quarters of those surveyed chose saving enough for retirement as their biggest fear, with long-term care expenses and broader health-care concerns finishing a distant second and third respectively.

Considering that those surveyed were people with at least $200,000 available to invest, some might be surprised to learn that even those who've done a much better than average job of setting money aside for their retirement years are nevertheless squarely focused on getting in even better shape.

That said, overconfidence can also pose a threat. Of those surveyed, more than half said they were in good financial shape with no obstacles between them and their goals. With the stock market at record highs, many of those investors may have forgotten just how quickly their retirement prospects deteriorated during the 2008-2009 bear market, when stocks lost more than half their value in just over a year and crushed many portfolios.

The solution: Make sure that you have an extra cash cushion above what you think you'll need to retire comfortably, so that no matter what happens in the markets, you can weather the storm without having to sell out at an inopportune time.

Social Security: Not to Be Trusted

As you approach retirement, one increasingly important issue will be how generous your monthly Social Security benefits will be. Considering the dire predictions about Social Security's ability to keep making full benefit payments in the long run, it's no surprise that survey respondents were skeptical about the program's role in their overall financial prospects. But there's no question the program is vital: Social Security is what separates 40 percent of Americans 65 and over from poverty.

But among the comparatively well-situated people surveyed, almost two-thirds believe that Social Security won't be a significant source of retirement income for them. Instead, they expect it will end up being a small supplement to income from other sources. Even among those who were less well-heeled and foresaw Social Security as a major part of their income in retirement, few expect Social Security to allow them to retire comfortably -- if at all.

The Social Security Trust Fund is indeed on uncertain ground, especially for those who won't start taking benefits for another 10 to 20 years. By 2033 (or sooner), if nothing changes, benefits will have to be cut by around 25 percent. The ideal scenario will be to have saved enough that you can treat Social Security as a bonus rather than a necessary component of your retirement income. Alternatively, though, deferring benefits until a later age or using more complex strategies can help stretch what Social Security benefits you do receive as far as they'll go.

Couples: Making Money Decisions Together

Much of the advice you'll find regarding retirement decisions treats the subject like an individual choice. Yet for couples, coordinating financial planning can be a huge challenge, especially when disparities in age and investing experience exist.

The survey found that although 44 percent of all men surveyed said they have primary responsibility for financial decisions, only 12 percent of women agreed with that sentiment, with much of the difference coming from more women than men believing that the couple makes its money decisions jointly.

There's no single right way for couples to coordinate financial planning. The biggest danger, though, is when one person gives up oversight regarding the family finances to the other, a move that often results in them not knowing the basics of where their money is, how much they have, or how it's invested.

If a spouse or significant other has always handled money issues for you, you need to spend at least some time getting familiar with the basic strategies governing your household's finances, what is invested where, and whom you can turn to for help if something happens to your spouse.

Don't Let Fear Stop You

Perhaps the best news from the survey is that despite concerns about not knowing enough about their money, do-it-yourself investing is gaining in popularity, with more than two of every five men and three of every 10 women participating in it.

With so many online-research resources at your disposal, learning some basic retirement investing techniques doesn't have to be difficult -- and it can go a long way toward easing your fears about how to deal with money after you retire.

You can follow Motley Fool contributor Dan Caplinger on Twitter @DanCaplinger or on Google+.

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"social security not to be trusted"- I couldn't agree with you more! I found an article here that helped me get over some of my retirement fears, like running out of income and what to invest in.

December 08 2013 at 4:43 PM Report abuse rate up rate down Reply
Robert & Lisa

Buy gold and silver. It will be worth something when the dollar loses all value. Better have some weapons to protect your assets though.

November 12 2013 at 7:15 PM Report abuse rate up rate down Reply

It is really funny what the die hard libs post. They are in such denial.
Love the sinner, hate the sin.
Love the liberal, hate the liberalism/Communism.

November 11 2013 at 11:23 AM Report abuse +4 rate up rate down Reply

Retiring soon? Thank a democrat for your social security and medicare. If you want to end these 2 fine programs vote republican for that is the way the GOP voted for these to programs when they first became law.

November 10 2013 at 11:55 PM Report abuse -5 rate up rate down Reply
2 replies to toosmart4u's comment

If you've had money stolen from your check every week for your entire working life, blame a Dem. The money your employer paid was YOUR MONEY TOO. You'll never get all your money back.

November 11 2013 at 11:21 AM Report abuse +1 rate up rate down Reply
2 replies to betty_brock's comment

Today's workers are paying the benefits for today's retirees. When today's workers retire, their benefits will be paid by those working then. Most people on Social Security receive more back than was paid in due to inflation.

November 11 2013 at 11:58 AM Report abuse rate up rate down

This country has aborted it's work force. Won't be enough paying in.

November 11 2013 at 8:06 PM Report abuse +2 rate up rate down

Ya, 80 years ago ! And the Dems have not made a mistake since then, ya right. Don't like either parties and all congressmen should be expelled or impeached. In my 60 plus years I've seen this country go down the crapper. I'll be lucky if I get a quarter of the monies that I have contributed over 50 years of working.

November 11 2013 at 11:50 AM Report abuse +2 rate up rate down Reply

Vote against liberalism/Communism in the next election. Vote Republican.

November 10 2013 at 10:35 PM Report abuse +2 rate up rate down Reply
1 reply to betty_brock's comment

I will NEVER vote for a republican again. Their only concern is themselves and couldn't care less about the masses.

November 11 2013 at 4:44 AM Report abuse -6 rate up rate down Reply
2 replies to David's comment

Obama is trying to kill the masses.

November 11 2013 at 11:22 AM Report abuse +2 rate up rate down

The masses are the problem. They need to get to work. This is a free country where most immigrants are better off than our lazy, spoiled, offspring.

November 21 2013 at 12:11 PM Report abuse rate up rate down

The chairman for the federal reserve is a bush jr. appointee whos term is coming to and end and then President Obama is appointing a woman to fill the roll. So it is you republicans who are printing the money.

November 10 2013 at 7:13 AM Report abuse +2 rate up rate down Reply
1 reply to toosmart4u's comment

First of all Obama has spent more money then Bush Sr Bush Jr Clinton and any 5 other presidents combined and we have nothing to show for it other then 17 trillion dollars in debt. Social security and medicare are not going anywhere. TheRepubs want it brought under control unlike you nut job Liberals who would rather tax the middle class into poverty so you can say Social Security is doing well which it never will be. Sort of like the Postal service. Medicare like it's state twin mediciad are in horrible shape and getting worse by the day. Now you Liberal money junkies and adding millions of other people on a system that can not sustain them. Thanks to you people the middle class will be taxed even more. More they can not afford to spend. So you think the Dems are doing so well? If so you must be like Obama. A complete liar. You may want to change your screen name.

November 10 2013 at 9:56 PM Report abuse +5 rate up rate down Reply
1 reply to bertnernie229's comment

The Dems will do anything to get a vote. They have sucked in all minorities, the poor and the elderly to believe that they can make a difference. Wanna bet Obama had some of his relatives in Kenya vote for him !

November 11 2013 at 11:53 AM Report abuse +1 rate up rate down

If you are on social security and medicare thank a democrat, if you want to end these two fine programs vote republican.

November 10 2013 at 7:00 AM Report abuse -4 rate up rate down Reply
2 replies to toosmart4u's comment

If you are middle class and want to be able to feed your children and pay your bills you would want to Vote REPUBLICAN. The Democrats are going to tax you into the poor house.

November 10 2013 at 9:57 PM Report abuse +3 rate up rate down Reply
1 reply to bertnernie229's comment

If you lose your job thru no fault of your own, don't count on Republicans to help you out in your time of need.

November 11 2013 at 4:46 AM Report abuse -3 rate up rate down

If you lost your Health insurance policy you can thank every Democrat that voted for Obama. Go up to them and tell them how nice it is to lose the policy's you have had for years on end. Tell how nice it is to pay double if not triple on new inproved policy's with covergage you have no plans on using. Thank a democrat for costing you your homes your healthcare your way of life. Thank a democrat for all these things they have given all of us. Better yet just punch a democrat. That is the only way they will ever learn.

November 10 2013 at 10:01 PM Report abuse +2 rate up rate down Reply

This is all well and good, but with the dot-com bust and recent market wiping out what little I had, SS is all the income I have to look forward to. So, how to I live on $1800 a month? First, move out of the city I live in and try to find a cheaper apartment and then hope I like dog/cat food...

November 09 2013 at 11:44 PM Report abuse +1 rate up rate down Reply
1 reply to Sandra's comment

I am truly sorry to hear the situation you are in. Millions of people are finding that they to are in this situation now. These are sad times and I wish something could be done but it seems as though these Democrats are spending everything and don't care anymore about the people they hurt. I am sorry and I say good luck. We are all going to need it.

November 10 2013 at 10:04 PM Report abuse +3 rate up rate down Reply

Stop voting for Democrat out of control spending.

November 09 2013 at 8:35 PM Report abuse -4 rate up rate down Reply
2 replies to betty_brock's comment

Sorry Betty, 11.5 trillion of our debt is from Republican administrations, and the majority of the Obama debt is to cover War costs (Equipment replacement & VA Healthcare), and Medicare Part D costs, both beginning under Bush, Medicare Part D alone costing taxpayers 3.3 trillion to date.

November 10 2013 at 10:53 AM Report abuse -3 rate up rate down Reply
1 reply to rostra's comment

Malarkey. Nobody has out squandered Obummer.

November 10 2013 at 10:34 PM Report abuse rate up rate down


November 11 2013 at 9:40 AM Report abuse rate up rate down Reply
1 reply to weldingsolutions's comment

I don't

November 11 2013 at 11:22 AM Report abuse -3 rate up rate down

Secret to retirement is to live within your means all those years you work and save a little each paycheck. It adds up over time and if invested wisely will give you an extra cushion to whatever retirement plan you have. Most importantly, if you have been living within your means and not running up debt, you will not have to reduce your standard of living when you retire. Those who live their lives in excess are like government when the retire, bankrupt, but not able to print money like Comrade Obaba does.

November 09 2013 at 5:32 PM Report abuse -1 rate up rate down Reply
4 replies to ltpar's comment