Retirement Reckoning: The 5 Biggest Fears Holding Back Middle-Class Workers

Retirement Anxiety Plagues the American Middle Class

Many Americans dream of retirement as a time when they can stop working, travel the world, spend time with loved ones, and pursue their passions.

But for Many, Retirement is a Source of Anxiety

On the other hand, the idea of retirement is suffused with anxiety and fear for a significant portion of workers, according to a report released Wednesday by the Transamerica Institute.

In Its 24th Annual Survey

In its 24th annual survey, the nonprofit retirement research organization homes in on the middle class, polling over 10,000 people with household incomes between $50,000 and $199,999. Many of them expressed concerns about their health and finances in their later years. About a third of workers anticipate working past 65, and 15% of them say they never expect to retire.

America’s Middle Class Navigates a Turbulent Post-Pandemic Economy

“America’s middle class is navigating the turbulent post-pandemic economy and high rates of inflation,” said Catherine Collinson, CEO and president of Transamerica Institute. “They are focused on their health and financial well-being, but many are at risk of not achieving a financially secure retirement.”

5 Biggest Retirement Fears for the American Middle Class

Transamerica has long tracked what Americans say they are afraid of when it comes to retirement. Over the past decade, in particular, their answers have remained notably consistent: The top three worries are almost always related to inadequate savings, declining health, and uncertainty over Social Security benefits.

1. Outliving Their Money

Americans’ greatest fear for retirement is undisputed. With one exception during the pandemic — when respondents rated potentially declining health as their top concern — people have consistently said they are most afraid of outliving their savings and investments.

2. Declining Health and Long-Term Care

Americans are worried their health as they grow older might put a damper on their retirement plans. As a very close second biggest fear, about 40% of respondents cited declining health issues that require long-term care as a chief retirement concern.

3. Dwindling Social Security Benefits

Social Security has traditionally been the backbone of the U.S. retirement system. About 55 million Americans receive retirement benefits each month from the agency, but it has serious funding issues. Social Security’s retirement benefit trust fund is expected to run out of money by 2033 without legislative intervention.

4. Developing Dementia

Aside from general health declines as they age, Americans appear particularly worried about developing Alzheimer’s disease or a similar dementia-related disorder. According to the Alzheimer’s Association, the disease is progressive and incurable.

5. Affording Long-Term Care Costs

Long-term care — whether it’s at home from a loved one or at a nursing facility — can be costly. While Medicare helps cover typical health care costs for retirees, to many people’s surprise, it does not cover any long-term care expenses.
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