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GOBankingRates’ editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services – our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines<\/a> and our products and services review methodology<\/a>.<\/p>\n 20 Years Trusted by Middle-class retirees face specific anxieties that keep them up at night. And here\u2019s the thing: They\u2019re not unreasonable for doing so. Every fear listed below has a basis in current events. The risks are real as money gets tighter for the beleaguered American middle class.<\/p>\n Now for the good news: Anyone dreading the future can relax a bit. With proper planning<\/a>, there are ways to safeguard your financial standing. Two financial experts explained the biggest retirement fears and provided concrete strategies<\/a> for addressing each one.<\/p>\n Outliving Your Savings<\/p>\n Dr. Robert R. Johnson, professor of finance at Creighton University\u2019s Heider College of Business<\/a>, cited research showing this as the top concern.<\/p>\n<\/p>\n \u201cAccording to the Transamerica Center for Retirement Studies<\/a>, the top fear of people aged 50 and over, 43% said their greatest fear was outliving savings and investment,\u201d Johnson said.<\/p>\n Ben Waterman, CEO of Strabo<\/a>, called this \u201clongevity risk\u201d and said it\u2019s \u201cthe biggest fear.\u201d<\/p>\n How to avoid it: Both experts recommended creating guaranteed income streams. Johnson advocated for annuities despite their controversial reputation. <\/p>\n \u201cAnnuities are an important part of a comprehensive retirement plan,\u201d he said. \u201cAnnuities too often get a bad rap<\/a>. They can provide guaranteed income and peace of mind to the retiree.\u201d<\/p>\n Johnson specifically recommended using annuities strategically. \u201cHaving an annuity cover your basic living expenses<\/a> is a terrific cornerstone to a retirement income plan. In particular, a longevity annuity is a stream of payments that starts when an individual reaches a certain age \u2014 say 85. If you have a longevity annuity, you have a secure source of income late in your life at a reasonable cost.\u201d<\/p>\n Waterman offered a broader approach: \u201cYou can mitigate this by creating guaranteed income streams, either with pensions\/annuities or systematic withdrawal plans that will cover your expenses for life.\u201d<\/p>\n The key is ensuring your essential expenses are covered by guaranteed income sources (think, Social Security, pensions, annuities) so market volatility can\u2019t force you into poverty.<\/p>\n Rising Healthcare Costs<\/p>\n Next up? <\/p>\n \u201cSecond (38%) was declining health that requires long-term care,\u201d Johnson said, again citing the Transamerica Center for Retirement Studies.<\/p>\n Waterman agreed that this ranks high among middle-class retiree concerns.<\/p>\n How to avoid it: Waterman acknowledged the difficulty of preserving one\u2019s health, but he provided a two-part strategy. \u201cThis is a bit more tricky. It can be tackled by building a dedicated savings buffer and with long-term health insurance.\u201d<\/p>\n Long-term care insurance purchased in your 50s or early 60s<\/a> costs significantly less than policies bought later. A dedicated healthcare savings account separate from general retirement funds<\/a> prevents one medical crisis from derailing your entire retirement plan.<\/p>\n The combination of insurance coverage and earmarked savings protects from the catastrophic costs of long-term care needs that can destroy retirement security.<\/p>\n Market Volatility Destroying Portfolio Value<\/p>\n Waterman identified market volatility as a major middle-class retiree fear, particularly the risk of being forced to sell investments during downturns to cover costs.<\/p>\n How to avoid it: Waterman recommended time-based planning. \u201cThis can be tackled by planning three to five years ahead and keeping this amount of living expenses in conservative assets that will help avoid you selling in a downturn.\u201d<\/p>\n![\"\"](\"https:\/\/cdn.gobankingrates.com\/wp-content\/uploads\/2023\/11\/icon-20.svg?webp=1&quality=75\"){kind=icon}
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