Halloween is still six weeks away, but Americans don’t need a horror-themed holiday to mull over some frights on the personal financial front.
Having enough money for retirement, covering college costs, stashing enough cash away for long-term care– all, and more, are issues that can keep average Americans up at night.
The financial news and advice website GoBankingRates.com has broken the money “scare factor” down into a list of the financial issues that are both the biggest frights, and the biggest priorities, for U.S. adults.
As part of the site’s 2015 Life + Money survey, here are some of the most troubling financial factors keeping U.S. consumers pacing the floor at 3 A.M.
– Always living paycheck to paycheck is the No. 1 financial fear of Americans today, followed by living in debt “forever.”
– 20% of people say their biggest money challenge is “sticking to a budget.”
– 20% of Americans say “planning for retirement is their primary financial focus.”
– More women than men say their “number one” thought is money.
– Men are more afraid than women of “losing money in the stock market, losing their jobs and not being able to retire.”
– Women are “more fearful” of always living paycheck to paycheck than men (25% vs. 18%).
– Planning for retirement is “more of a financial challenge for men than it is for women “(20% vs. 17%).
An interesting takeaway from that study, and from conversations the MainStreet recently had with other financial industry professionals, is that fear actually extends out over the long term, with retirement and long-term medical care huge, anxiety-provoking issues among U.S. adults.
“The biggest fears I see include having to rely on your kids to support you in your old age and having to live in a dirty, dark nursing home,” says Laurie Itkin, a San Diego, Cal.-based financial advisor and founder of the financial advice website The Options Lady. “You’d also have to include losing everything in a divorce, and having to sell your home at a loss because you need the money.”
Katherine Gauthier, a Baton Rouge, La.-based single mother has both short-and long-term financial fears that any single parent can relate to. “At the top of my list is catastrophic illness, or an injury of my child or myself that demands all of my income and restricts my ability to earn,” she says. “As a single parent, there’s always the threat of discovering yet more unknown debt that my ex left me ultimately responsible for by defaulting, as Louisiana is a community property state.”
“I never forget that I am one downsizing move or one car accident away from losing financial stability — that’s my reality,” Gauthier adds.
Medical care that could drain a bank or retirement account, even for consumers with health care coverage, is also a common fear among average Americans. “Everyone says the biggest fear is outliving their money, but that’s not true,” says Alan N. Canton, founder of A.N. Canton Insurance Services, in Fair Oaks, Calif.
If people have to live on half of what they have now, they do adjust – they become vegetarians or move to city where no car is needed, or relocate to a place where the cost of living is low, Canton says. “The real fear is that people will get sick and lose all of their money to the medical system and end up on welfare,” he adds. “Sure, they have Medicare, but many don’t find out until it is too late that Medicare does not pay 100% of everything, and that there are some major gaps.”
Losing a job and having to find a new one, especially at an older age, also haunts Main Street Americans. “Being unable to find a job after being dismissed from one is a big threat,” says William L. Seavey, owner of a bed-and-breakfast in Cambria, Calif. “Older workers are not likely to be able to play the new social media game well when it comes to job seeking.”
Clearly, bogeymen living under your bed are no match for the real financial fear factors in regular Americans’ lives – not having enough cash in retirement, the inability to pay for medical care, and loss of a job, among others. With Halloween now on the horizon, those are the income issues real nightmares are made of.
Written by Brian O’Connell of TheStreet