The sad truth in America today, is that older Americans are more afraid of running out of money later in life than they are of death itself. In fact, according to a recent Transamerica study, 43% of workers 50 and older claim that their greatest retirement-related fear is outliving their savings. Really?!! Who wants to consider that, after a lifetime of scrimping and trying to get by, you (or your loved ones) cannot afford to pay your final bills?
It’s no secret that many Americans are unprepared for retirement, but here are some statistics I found troubling:
Roughly 33% of Americans have zero retirement savings.
56% of Americans have less than $10,000 put aside for retirement.
Only 31% of seniors 65 and over have $200,000 or more in a retirement account.
About 25% of Americans 65 and over rely on Social Security as their only source of retirement income.
A survey released last year by the American Institute of CPAs found that 57% of financial planners list running out of money as their clients' primary retirement concern.
Knowing that, let’s take a look at some average end of life costs. Recently, the National Bureau of Economic Research found that the median out-of-pocket costs for end of life care to be $11,618 in the United States. Obviously, this could be far higher due to extra expenses such as medical care. But wait. There’s more. According to the National Funeral Directors Association, the average cost of funeralization in the United States is upward of $7,360. Additionally, the Cremation Association of North America, says the typical cremation costs an average of $1,650, which includes a memorial service. Without the memorial service, an average cremation is $725.
A lot of families don’t have that kind of money. When a loved one dies, they are forced to either not claim the body – or sign a release saying they cannot afford to bury them. This sad trend has been happening more and more across the country. According to Albert Samuels – chief investigator at the Wayne County Medical Examiner’s Office in Michigan – about 50% of the bodies they have for burial, belong to families who do not have the means to bury them. Similarly, the Clark County Coroner’s Office in Nevada noticed a 22% increase in burials and cremations of unclaimed bodies this year.
Dr. Jeffrey Jentzen, chairman of the board of the National Association of Medical Examiners says that in addition to the climbing number of unclaimed bodies, every medical examiner he has talked to has also had major cuts in financial support from their county. What happens then, is that the bodies are cremated after a month. The family has two years to claim the ashes at a cost of $400. After two years, if left unclaimed, the ashes will be buried in a common grave with the ashes of others left unclaimed.
If running out of money in retirement really is a fear worse than death, why aren't more Americans doing something about it? The earlier statistics are not always a matter of misplaced priorities or lack of planning. As we all know, financial circumstances can change in an instant. A drop in the stock market, a life-altering accident, unforeseen legal expenses, etc., there are a million ways someone’s savings and/or retirement can become endangered or extinct. To make matters worse, many Americans have, in recent years, fallen victim to fewer options for saving, as well as stagnant wages, and pension plans seem to be a thing of the past.
If you have found yourself nearing retirement, and are nervous about your financial ability to maintain care of yourself, it’s not too late. Now is the time to max out your IRA or, your company’s 401k program, if there is one offered. Crowdfunding is becoming a key element for creating an additional revenue stream during this time. What if you have found out that you are potentially terminally ill? With the time you have left, you can begin to prepay your own funeral expenses.
Pre-paying your final expenses takes the financial burden off of your loved ones when you are gone, think of it as a “parting gift”. Keep in mind, it is a good idea to be honest with your funeral director about your financial situation. Many funeral homes offer pre-planning packages and payment options, which frequently allow you to make installment payments, and possibly to lock in current pricing as well. Funeral Directors understand that finances are regularly an issue, and the good ones will give you a range of their least expensive services.
Everyone know the list of life’s certainties: We pay taxes. We will die. Let us not assume from this that death is in any way free. Create a free fundraiser with MyRespects.com and start saving and planning today.