2. Fear of wobbly social security
A Gallup survey found that social security is the primary source of income for three in five retirees, but only one in three nonretirees have access to benefits when they need it. I believe it can be used.
Talk of Social Security going “bankrupt” has swirled for years, fueling a growing lack of confidence. “People under the age of 50 are embracing ruin and depression,” says Kuderna.
Are you unable to sleep at night? As long as workers continue to pay for the program through payroll taxes, Social Security will continue to pay benefits. However, the company pays out more benefits than it earns each year, and makes up the difference by leveraging cash surpluses in trust funds.
That surplus will be exhausted by 2034, according to the latest projections from the Social Security Council.of Congressional Budget Office estimates Trust funds will run out even sooner, in 2033.
This doesn’t mean you won’t be able to get Social Security, but it could significantly reduce the amount you get. Unless Congress takes steps to strengthen the program’s finances, benefits will be cut by more than 20% when the trust fund dries up.
3. Fear of volatile markets
Stocks go up and down. These days they’re doing the latter, which scares investors, especially those who rely on investment accounts to support their retirement lives. Forty-eight percent of non-retirees surveyed by Gallup say they expect their 401(k) or IRA to be their primary source of retirement income more than any other source.
“Non-retirees are much more pessimistic about their ability to pay for Social Security and put more of their income into their 401(k), which makes them more sensitive to stock market and retirement account shocks,” Kuderna said. says.
Are you unable to sleep at night? It’s easy to panic and sell when markets are down, but history shows that holding the status quo is the better option. Let’s say he invested $10,000 in stocks in December 2007 and resisted the urge to sell during the market turmoil of 2008. That his $10,000 investment was ultimately worth his $35,461, even though his S&P 500 lost half its value in the financial crisis. It is scheduled for 2022, according to Putnam Investments.
“Over the long term, the stock market has done very well,” Henderson said. “People should not be overly concerned about short-term market fluctuations.”
To ease lingering market anxiety, try to maximize retirement income, such as pensions and social security benefits, that are immune to bulls and bears. You can claim Social Security from age 62, but waiting until full retirement age (67 if born after 1960) will increase your monthly benefits by 43%, and deferring to age 70 will increase your monthly benefits by 77%. increase.
