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Retirement Security at Risk

We live in an age where most Americans are expected to be responsible for their own retirement income. Gone are the days when you worked for one company most of your life and received a pension when you retired.

The US recently dropped to number 18 out of 44 developed countries for financial security and material wellbeing.  A recent survey on retirement found that this year is on track to be one of the worst on record to retire. The market downturn and sharp increase in food, gas, housing, and medications have hit retirees particularly hard. Longevity is the other factor that affects how much money is needed, investment return expectations, and spending rates.

Nearly three-quarters of Americans said that inflation is affecting their plans in some way, from how they invest to when they plan to retire. Twenty percent say they are putting off retirement till a later date, eight percent are planning to work part-time during their retirement and five percent say they’re considering moving somewhere more affordable.

The biggest retirement planning mistakes investors make are:

  1. Underestimating how long you will live: 61%
  2. Underestimating the impact of inflation on your retirement income: 57%
  3. Being too conservative with your investments: 54%
  4. Overestimating your investment income: 52%
  5. Forgetting to factor in healthcare costs: 49%

In light of these findings, retirement security requires a new approach.  

Reevaluate your retirement income goals

The amount you had previously calculated may no longer be valid.  With the new information and current conditions, do the calculations again. You can’t know how long inflation will last but make allowances for higher prices in the future.

In the past, some experts advised saving $1 million for retirement.  In light of recent events, that number has doubled to $2 million.

“It can be daunting to have to adjust your retirement plans,” says Gary Isler, Senior Vice President of Investments for David Lerner Associates. “You need to have a sound investment strategy if you want your savings to grow and provide the income you need when you retire.”

In a rapidly changing financial environment such as this, it can be tough to make these decisions and feel confident you’re on the right track. Talk to your financial advisor and get all the information you need to adjust your savings and investment strategy to weather this uncertain time. Retirement Security will give you peace of mind now and in the future.


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.

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. Mem

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