For years, many Americans have looked forward to their retirement, when they
can stop working and relax. Instead of respite, however, many of today's
retirees are starting to find their golden years fraught with financial
difficulties and emotional woes.
Today's retirees can expect to be considerably more on their own than their
parent's generation was, says Clare Hushbeck, an economist for AARP.
"For people near their retirement, in their late 50s and 60s, it's probably
not such a radical change from what their parents had," Hushbeck explains. "The
younger boomers and the people behind them face a radically different sort of
After years of pumping money into the U.S. economy, baby boomers are
beginning to leave the workplace and to use the same social and health benefits
awarded their predecessors. Yet expected to support the boomers is a smaller
labor force. This has analysts worried about the solvency of services such as
Social Security, Medicare, and Medicaid, especially with people living
longer than ever before.
The expanded life span also has people worried about being able to save
enough money for retirement.
"The biggest challenge financially is health care costs," says Dan Blazer,
MD, PhD, MPH, president of the American Association for Geriatric Psychiatry.
He says the unknowns -- the number of years a person will live, and the quality
of his or her health -- make planning for expenses more difficult.
For instance, some people fail to account for extensive stays in nursing
homes, a cost that is not covered by Medicare.
Improving Your Financial Outlook
To improve your financial portfolio, the experts advise the following
Consult with a financial planner. To get unbiased advice,
pay a flat fee for a visit, recommends Jack Vanderhei, research director of the
fellows program for the Employee Benefit Research Institute (EBRI). In free
financial planning sessions, the consultants have the burden of trying to sell
Do a self-audit of finances every year. Starting at around
age 30, Hushbeck says it's a good idea to take a few hours every year to assess
your financial situation. Think of where you are financially, where you want to
be, and how much you expect to have and spend during retirement. This may sound
like an unpleasant task, in the category of "eat your spinach," says Hushbeck,
but it's a worthy action that can put you on the road to financial
Take advantage of trusted resources. In addition to
staying abreast of current events regarding Social Security, Medicare, and
Medicaid, read informational brochures published by government and nonprofit
agencies. Educate yourself at retirement workshops sponsored by your employer,
unions, credit unions, churches, nonprofit groups, or government organizations.
Also take advantage of tools such as retirement calculators that can be found
Think positive. Your attitude can help determine your path
in life, including your financial situation, says Robert Hotes, PhD, a fellow
of the Association for Psychological Science (APS), noting that even the stock
market is vulnerable to the outlook of investors. "Take a look at the
assumptions you make and what you tell yourself," he explains. For example, if
it turns out your pension and Social Security benefits will not cover your
retirement, think of taking on a part-time job in retail as an opportunity to
fulfill a long-held desire to pursue a career in sales.