A recent survey by BadCredit.org paints a concerning picture of financial insecurity among American retirees. Despite 78% of those surveyed being retired, over half (59%) lack sufficient funds to comfortably maintain their desired retirement lifestyle.
The study highlights several key issues faced by retirees:
- Financial Instability: 35% of retirees report feeling financially unstable, struggling to cover everyday expenses (37%) and unexpected emergencies (63%).
- Insufficient Savings: Many retirees overestimated Social Security benefits, which average $1,700-$1,900 monthly, and failed to save adequately.
- Rising Costs: Factors like high housing costs, inflation, and medical care expenses further strain retirement budgets.
This financial stress can significantly impact retirees’ quality of life. Fortunately, options exist to improve their situation:
- Boosting Income: 58% of retirees have already sought additional income through part-time jobs or freelance work, which doesn’t affect Social Security benefits if past retirement age.
- Home Equity Leverage: Homeowners over 62 with paid-off mortgages may explore a reverse mortgage to tap into home equity for income, though potential downsides exist.
- Budget Adjustments: Downsizing, finding areas to cut expenses, and exploring free or discounted activities offered by local programs can help retirees stretch their finances.
Expert Advice: Erica Sandberg, a consumer finance expert at BadCredit.org, emphasizes the importance of action: “Figure out how much you need and take steps to change your situation. There are options to increase income, utilize home equity, and cut back on spending.”
This survey underscores the critical need for financial planning before retirement. By saving adequately and exploring income options, future retirees can avoid the financial hardships faced by many today.
