The 2 Biggest Problems Retirees Will Face

Many retirees say their health and finances are worse than expected.

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The two biggest problems all retirees will face are related to finance and health. A new study commissioned by NPR, the Robert Wood Johnson Foundation, and the Harvard School of Public Health shows us what we already know, but often refuse to believe. Some 22 percent of pre-retirees predict that their finances will suffer after retirement, and 35 percent of retirees say their finances have gotten worse. Only 13 percent of pre-retirees think their health will decline in retirement, but 39 percent of retirees report that it's true.

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Many of us wear rose-colored glasses when we plan for the future, and we need to begin viewing retirement more realistically. When we stop working, our major source of income dries up. And as we get older, it is obvious that our health will deteriorate. So why are so many people underestimating the difficulties of retirement? It is best to plan for these two problems while we are still working and have a good income.

Finance. Some two-thirds of Americans do not save enough for retirement. It's time for a reality check. We all need to resolve to save more for retirement and follow through. If you are not saving for retirement right now, it's time to make a plan. It's better to start saving for retirement as early in your career as possible so compound interest will work in your favor. The longer you put off retirement saving, the more difficult it will be to retire comfortably. There are tax-advantaged retirement saving vehicles such as a 401(k) and Roth IRA that will reduce the drag of taxes on your long-term savings.

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Health. This is a much more difficult issue because there are so many things that we can't control. However, we can focus on the aspects of our health we can do something about. Over 68 percent of American adults are overweight or obese, which is a long-term health risk. Heart disease, strokes, high blood pressure, diabetes, cancer, gout, and many other medical conditions are associated with obesity.

There are also many other lifestyle choices that we can make to maintain good health. Smoking and excessive drinking cause many future health problems such as cancer, liver disease, and diabetes. It's best to moderate our enjoyment of these pleasurable vices to give our future self a better chance at staying healthy. It is important to minimize these health risks as much as we can. This may not be easy, but the healthier you are now, the less likely you are to have to deal with costly health problems later.

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Are you compromising your retirement years by not maintaining a healthy lifestyle and not contributing to your 401(k) plan? It's not too late to think about the future and start a long-term plan for your retirement. It is much easier to begin saving for retirement and working on your health while you are young. If you ignore retirement savings and maintaining your health until you are 65, it could be too late to do something about it.

Joe Udo is planning an exit strategy from his corporate job by reducing expenses and increasing passive income. He blogs about his journey to early retirement at Retire by 40.