Retirement is supposed to be a period of joy and relaxation for our nation's senior citizens, but these seven monumental financial challenges are spoiling that dream for some seniors.

Retirement is supposed to be a period of joy for senior citizens where they're able to travel, reflect, and sometimes just put their feet up if they choose to do so. Unfortunately, far too many senior citizens are finding themselves denied of the American dream of retiring comfortably and on their own terms.

Based on a study conducted by Bankrate in 2014, more than a third of all working adults had failed to save a cent toward their retirement. This rate was particularly high among millennials, but even among those aged 65 and up, 14% reported no retirement savings! In other words, if the data from this study carries over into the broader population, one-in-seven seniors has no retirement savings whatsoever.

This is a problem -- and it's being compounded by a handful of major challenges that many senior citizens are currently facing. Let's briefly run through the seven biggest financial challenges facing seniors, in no particular order, and then afterward we'll offer a few suggestions aimed at boosting income in retirement.










The seven biggest financial challenges facing seniors in retirement.

  1. Historically low interest rates: One of the more visible problems for senior citizens has been the Federal Reserve's more than six-year run of keeping the federal funds target at a record low. While low lending rates tend to boost hiring and allow businesses and homeowners to refinance debt at attractive levels, it's effectively wiped out the opportunity to net substantial income from fixed-income investment such as CDs, money market accounts, savings accounts, and bonds. Chances are a majority of these investment tools aren't outpacing inflation, thus costing seniors real money.

  2. Distrust of the stock market: The Great Recession wound up being a great opportunity for long-term investors to load up on attractively priced stocks. However, for senior citizens it's a reminder of the volatile nature of the stock market, which works contrary to their general risk-averse nature. Thus, while the broad-based S&P 500 has bounced more than 200% off of its lows, senior citizens have mostly kept to the sidelines and stuck with low-yielding fixed-income investment vehicles.

  3. Social Security problems: Based on the 2015 Social Security Fact Sheet from the Social Security Administration, around half (52%) of all aged couples count on Social Security for at least 50% of their income in retirement, while 47% of unmarried seniors count on Social Security income for at least 90% of their income in retirement. This a potentially big problem considering that the Old-Age, Survivors, and Disability Insurance Trust, or OASDI, will burn through its remaining cash reserves by 2033. If nothing is done by Congress, seniors could be facing a 23% benefits haircut by 2033.

  4. An unfavorable jobs market: For seniors with little-to-no retirement savings, or those who are overly reliant on Social Security income, going back to work is a viable option. Unfortunately, the job environment for senior citizens isn't all that welcoming. Although older workers are more likely to be retained by businesses, it takes older workers longer to find a job once unemployed, and in general, businesses are opting for younger employees that are willing to accept lower wages, further hurting the job prospects of seniors.

  5. Rising healthcare costs: Heading into retirement there's the misconception that Medicare is a fix-all program for the elderly. Unfortunately, it doesn't cover all medical costs, and the out-of-pocket expenses for their medical care can be quite extensive. In fact, in 2012 the Employee Benefit Research Institute estimated that one-in-five seniors skipped seeing their doctor because of high out-of-pocket costs. There's also a focus by drug developers and medical device makers to create novel targeted and/or personalized therapeutics, which are expected to continue to push the price of drugs, diagnostics, and medical devices even higher.

  6. Debt: Instead of entering their golden years debt free, more and more senior citizens are finding themselves buried up their necks in debt. In 1992 just a quarter of all homeowners over the age of 62 still had a mortgage payment. This figure had risen to 45% by 2010. Furthermore, student loan debt for senior citizens (yes ... student loan debt!) has jumped more than 500% from 2005 to $18 billion.

  7. Feeling obligated to assist their adult kids: Lastly, a report last year from the Pew Research Center showed that of seniors aged 60 and up that are no longer working, 43% admitted to helping their adult children pay their bills. I certainly can't fault seniors for helping their children or family, but it's having serious implications on their remaining nest egg. It's also worth noting that 20% of that $18 billion in aforementioned student loan debt was taken out to support a child or dependent going to college.