The burden of preparing for retirement is increasing as workers face more risk and rising costs. Escalating housing, healthcare, and long-term care costs in retirement are creating retirement obstacles for Americans. Also, the shift from pensions to 401(k) plans has pushed more retirement risk onto workers.

These findings will be detailed in a new study, The Growing Burden of Retirement: Rising Costs and More Risk Increase Uncertainty.

This report provides a roadmap to the many hurdles that are making it increasingly difficult to achieve a financially secure retirement. The report finds that:

• Saving early and continuously during working years is difficult for many workers. While organizations offer suggested retirement savings targets for each age, many workers may struggle to meet them, even if they have a desire to save.
• Workers face market timing, interest rate, and longevity risks when they approach retirement age. Any of these risks can derail carefully laid retirement plans and together they can make the prospect of retirement daunting.
• While older Americans are the most likely to own a home, the number of Americans age 65 and older who are cost-burdened by housing costs has increased as more seniors are carrying mortgage debt into retirement.
• Healthcare costs continue to rise for all Americans, but these costs are higher for older Americans, who are more likely to have multiple chronic health conditions. Furthermore, lower-income seniors spend a greater proportion of their income on healthcare costs than their more affluent peers.
• Long-term care costs represent an increasing challenge for many older Americans as more senior citizens need long-term care every year. While it can be prohibitively expensive for those who require nursing home care for multiple years, the majority of seniors receiving long-term care will receive it at home or in a non-nursing facility. This need is projected to increase even more as the Baby Boomers continue retiring.
• Creative solutions exist to address these challenges. Washington State is pioneering a program to cover long-term care costs using a social insurance model. The private sector is working to create lifetime income options for retirees and expand access to workplace plans. Meanwhile, experts have proposed allowing retirees to purchase annuities through Social Security. And, expanding Social Security would have a broad impact as most seniors receive the majority of their income through the program.