David Lerner Associates: Older Americans are Blazing a Trail to Retirement

The theme of Older Americans Month 2016 is Blaze a Trail. The idea is to use this theme to raise awareness about important issues facing older adults. Retirement is certainly one of those issues. According to the Government Accountability Office, among households with members aged 55 or older, nearly 29% have neither retirement savings nor a traditional pension plan.

Even those older Americans who do have some retirement savings, their nest eggs are small – on average about $104,000 for households with members between 55 and 64 years old and $148,000 for households with members 65 to 74 years old. That amount would be equivalent to an inflation-protected annuity of $310 and $649 per month, respectively, says GAO.

• Only 33.7% of American households have an IRA
• 38% of Baby Boomers have an IRA
• 14% of Americans over 50 who qualify to save more to “catch-up” took advantage of
  this rule
• 17% of American households have given “no thought at all” to retirement

Choosing to save for retirement and making the right long-term investments are among the most important decisions you'll ever make. Guessing at the number you’ll need to retire comfortably and relying on Social Security is likely to leave you in a difficult situation come retirement.

Blazing the Trail to Retirement

• Get your wits around your finances. Spend an hour or two each month understanding your income and expenditures. Once you know exactly what your cash flow is, what you can save, and when your major items like a mortgage might be paid off, you can estimate a number for retirement.
• Learn about different options. Where you put your extra money and how it grows is vital to the success of your plan. Look into tax-advantaged retirement accounts that defer taxation, or in the case of a Roth IRA, are exempt them from taxation, as long as you don’t make any unqualified withdrawals.
• Take the sensible middle ground of investing. Take the long-term view rather than a high-risk return. Over time, a good investment strategy helps you weather ups and down in the economy and the market.

IMPORTANT DISCLOSURES

Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities.

Certain investments are offered by prospectus. Investors should read the prospectuses carefully and consider the investment objectives, risks, charges, expenses and other information before investing.

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law.

Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. Member FINRA & SIPC.