It's not only ghosts and goblins lurking around the corner this Halloween. The true terror haunting millions of Americans is the prospect of retirement.
Who can blame them? A retirement that could last two or three decades requires a substantial amount of money. How much? $1.26 million, according to one oft-cited estimate. That’s just the average. If you lived in Hawaii, another study puts your needed nest egg at $2 million, and higher lifestyles require more.
And that’s just one part of the potential nightmare. Here are eight more things about retirement that nightmares are made of.
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1. Long-term care in retirement is almost a given
Roughly 70% of Americans age 65 and older will require long-term care at least once in their lifetime, according to the U.S. Department of Health and Human Services. That encompasses everything from a nursing home to in-home care. How much care a person needs depends on their unique circumstances.
Either way, it ain't cheap. Today, a month of long-term care costs $6,000 to $15,000, depending on the level of care needed. That's $72,000 to $180,000 a year. If you need multiple years of care, you can see how the costs can add up pretty quickly.
To scare you even more, only 3% of U.S. adults, or 15% of those 65 and older, have long-term care insurance.
2. Healthy retirees spend a lot on health care too
Even if you are among the lucky 30% that don’t require a stay in long-term care, you still need a lot of money for out-of-pocket medical costs during your golden years — frighteningly so.
Fidelity Investments pegs the amount a 65-year-old will spend on health care in retirement at $172,500 for 2025. That’s up 4% from $165,000 in 2024. Back in 2002, the first year Fidelity put out an annual estimate, the cost was a mere $80,000. One-in-five people told Fidelity they never considered health care needs during retirement.
3. Social Security is running out of money
This one is sure to scare retirees: Social Security is struggling financially. The program is only fully funded through 2035. After that, if no changes are made to secure more revenue, retirees will receive about 83% of their benefits. To make up the shortfall, the SSA will need to increase revenue and/or trim benefits.
While Social Security is not at risk of going bankrupt, that hasn’t stopped people from collecting Social Security benefits as soon as they can to get ahead of the potential funding shortfall. The second most popular age to begin receiving benefits is 62, the first year you can collect. (The most popular age is 66, according to a recent Congressional report).
That’s even though you get an up to 30% reduction in lifetime benefits for collecting before your full retirement age, which for people born in 1960 and beyond is 67.
4. Medicare doesn’t cover it all
One of the perks of turning 65 is that Medicare kicks in, and you don’t have to worry about paying for health insurance anymore. But what you may not know is that Medicare only covers 80% of your health care expenses in retirement.
Some of the things Medicare won’t pay for may give you goose bumps. Check out eight things Medicare doesn’t cover here.
5. Adults aren’t saving enough for retirement
We’ve been hearing it for years: save early and often to live comfortably in retirement. Nonetheless, GenXers have been blowing off the advice of the baby boomers before them.
AARP, the non-profit advocate for older adults, found in a recent survey that 20% of Americans 50 and up have no retirement savings at all. Ready for another hair-raising shocker: 40% of Americans polled by U.S. News don’t have $1,000 in cash to cover an emergency.
6. The cost of living is going up, up and away
Ten years ago, the median home in America was worth $183,000; today it's valued at around $364,000. Meanwhile, rents have risen by more than 50% over the past decade.
Automobiles, vacations, luxury goods and dining out all cost more, and that isn’t stopping anytime soon. September’s Consumer Price Index — the most recent data available — shows inflation is up 3% year-over-year.
Let’s not forget insurance; whether it's health, homeowners', or auto insurance, premiums are rising, with double-digit increases in many cases. Take the Affordable Care Act as an example. Rates are forecast to increase an average of 26% in 2026.
7. Loneliness among older adults is reaching epidemic levels
Everyone feels lonely from time to time, but for one-third of older adults in America, they experience feelings of loneliness at least once a week, according to the University of Michigan’s National Poll on Healthy Aging.
For another hellraising statistic, as of last year, 17% of Americans, not just retirees, said they have zero friends, up from 1% in 1990, according to the Survey Center on American Life. There are many ways to combat loneliness and have a fulfilling retirement. Check out our guide to a happy retirement to learn how.
8. The Dementia risk is real
Memory loss is normal as we age, but here’s something that may spook you: so is dementia. It turns out, you have a 42% chance of getting dementia after the age of 55. Worldwide, someone develops dementia every three seconds.
The financial and emotional toll of dementia can not be overstated, but the good news is that doctors and scientists are learning more about this debilitating condition every day, including new ways to treat and prevent it. Learn more here.
And something to celebrate...
It’s not all doom and gloom this Halloween.
Here is one mind-bending Halloween statistic that may have you happily reviewing your retirement plan or hiding under the covers: there are 722,000 people over the age of 100 around the world, and that's forecast to soar to 3.7 million by 2050.
The real trick or treat: you could be one of the lucky ones who need to fund more than thirty years in retirement.
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