Many older Americans may feel secure with their retirement savings, but a new report, Hope Is Not a Strategy, has revealed that there are many retirees preparing for retirement who may face unexpected financial difficulties.
This may be particularly true for those who have invested in the stock market. The economic downturn has made returns on investments shaky at best and nonexistent at worst.
The Wall Street Journal reports that inflation has played a pivotal role for many savings accounts, making investments worth much less than predicted. While many pension fund managers may be expecting funds to grow by 5 or 6 percent a year, the report has found that a rate of 2.1 percent is more likely.
A retiree who has saved $10,000 for 30 years, investing at 5.5 percent a year, can end up with $760,000 in savings. However, someone who earns 2.5 percent on the investments will only receive $420,000.
Unexpected medical conditions can become one of the costliest incidents of retirement. One way to save money is to invest in a senior alert system, which is a medical alarm that can allow older adults to contact neighbors or doctors in the case of an emergency and limit the duration of hospital stays.