Why Some People Fear they May Never Retire

For most people looking forward to retirement, it can seem the day might never come. Usually that’s just because the date seems so far away. But for some, the prospect of never retiring is more than an exaggeration – it’s a very real possibility.

Even after passing the “light at the end of the tunnel” age of 65, more Americans are finding themselves faced with serious financial struggles. While 60-65 has been the age for traditional retirement, older individuals these days are working years – sometimes decades – beyond. And a report by HSBC highlights that many people fear they’ll never have the opportunity to retire.

The problem? Sustainable financial security doesn’t always seem attainable, for reasons we’ll discuss below. Individuals are concerned that their foreseeable golden years will be filled with the game of ‘financial catch-up’ rather than filled with the expected financial security and peace of mind.

So is it true? Is retirement becoming an elusive dream?

In many ways, the worry is valid. With the decline of pensions and household savings rates, individuals are left to fend largely for themselves in retirement. Many aren’t finding it realistic to rely on Social Security and are accepting that a lengthened career might be the only way to gain realistic retirement returns. Though they hope to eventually reach the goal, financial hardship and health burdens can make it a challenging pursuit.

But that’s not to say there aren’t ways to address these issues. Here are some of the challenges faced by the current and upcoming generations – and some actions to take in order to combat them:

Decline of pensions: What once was a sturdy pillar of most people’s retirement plans has crumbled and decayed. The pension is a thing of the past for most of today’s workers, which means we’re all forced to plan for our retirement on our own. In order to avoid being caught off guard, make a plan for how much you’ll need to save in order to retire comfortably.
Limited savings: Americans have been saving less and less over the years, and that tends to catch up to us once we near retirement age. In order to buck the trend, you’ll need to start saving early. You should know how much you need to save each year and what percent of each paycheck must be deposited to your retirement account. Think of this just like a bill that has to be paid – that way, when you finally reach your retirement you’ll have a substantial nest egg waiting for you.
Longer lifespans: It’s no secret that people are living longer on average, which is good news for us but bad news for our retirement accounts. How do we make our money last longer and stretch further? One way is to take into account the longer lifespan and the rising cost of healthcare when you are making your retirement calculations. You should account for a potentially expensive long-term retirement and start saving accordingly.
Long-term debt: Finally, watch out for debt! With lots of families relying on credit cards to get through the recession and tough economic times, and with student loan debt increasing every year, the potential for debt to undermine your retirement is greater than ever. So vow to start tackling your debt right now! If you need help figuring out a plan to pay off your debt, take a look at ReadyForZero’s resource centers for credit card debt and student loan debt, which you can see here and here, and start paying those debts off month-by-month.

It’s not easy to save for retirement, but with these long-term trends in place and uncertainty surrounding social security, it’s better to be prepared than to end up reaching retirement age without enough money to survive on. Being proactive in your approach can help to ensure you enter into retirement with plenty of peace of mind.

This piece was contributed by Rod Ebrahimi, CEO of ReadyForZero and does not necessarily reflect the views or opinions of NerdWallet.