FOX – WOFL
Click here to see if you are saving enough for retirement – Retirement Savings Calculator
The American workforce is going gray! A report out this month by the Conference Board found a startling number of people are ripping up their retirement plans.
What is driving this trend & what we can do to avoid becoming part of the statistic?
Nearly two-thirds of Americans between the ages of 45 and 60 say they plan to delay retirement. That is a more than 50% increase from just two years ago. The average retirement age is already up. A Gallup poll from last April found the average age of retirement is 67, that’s up from 63 a decade ago.
So what is causing this trend?
According to the report, it is being driven by these past few years of recession and recovery- the financial losses, layoffs and income stagnation. If we think about where we were two years ago, the economy seems better, the stock market has earned back most of its losses, home prices are going up again and the unemployment rate is creeping down
So why are people feeling the need to delay retirement?
Many people were forced to pull from savings or take on debt during those tough years. Plus they are facing low interest rates on investments, uncertainty in the future of Social Security, and they’re less likely to get employer health insurance after retirement.
So what should people be thinking about and doing before retirement?
Plan, plan, plan! This is what I am working on with my clients everyday… you need to get a plan in place and you need to stick to it.
You should ask yourself Do you have enough money saved? It is about more than just having a lot of money; think about how to turn that into a form of income. I’m talking about a guaranteed income whether it is annuities, pensions, Social Security- something to cover your basic expenses. It is good to talk to a financial professional about which of these will meet your specific needs.
Also, don’t forget to factor in inflation. I recommend calculating 3% annually for inflation. That means in 20 years, your cash flow needs will double.
And finally, you’ve got to consider health care. Even with Medicare and supplemental policies, a couple can easily spend more than $250,000 out of pocket on health care in retirement, according to a report last year from Fidelity Investments. That is a huge figure, something that needs to be considered.
Additional Resources:
Retirement Savings Calculator
