It’s just a fact of life – we all grow older. Until someone discovers the fountain of youth, we must all face the fact that the time will come when we need to finance our older years. And that requires retirement planning.
Making sure that you have enough set aside for your retirement years should be a priority for just about every American. “Boomer Expectations for Retirement,” a new annual study from the Insured Retirement Institute — a trade body for the annuity industry — makes shocking reading. Most Boomers are unprepared for retirement, even as they approach it or enter it. Amazingly, barely 1 in 10 has enough saved up.
The younger generations are also weak in savings for retirement. Curiously, Millennials are the ones who are mostly on track. They start saving earlier and put away a higher percentage of their earnings than GenXers or Baby Boomers.
If you consider the findings from the Bureau of Labor Statistics, the picture looks bleak indeed. The average American household spends more than $40,000 a year during retirement, while the average American citizen collects less than half of that from Social Security annually.
Saving for your retirement early is the only way to make sure you have enough set aside when the time comes to enjoy your golden years. Without a solid foundation under you from savings or investments or preferably both, you won’t be able to stop worrying about your finances. This will cause stress, and that is not the way you want to retire. Get as much professional advice as you can, and work out a strategy that works for you.
Bankrate estimated that half of the American population will not be able to support themselves with their current standard of living once they stop working. So, it seems that people are not saving nearly enough if they want to maintain the way they live their lives.
It’s not just long-term concerns that people aren’t taking into account when they’re planning their savings strategy. You need to factor in your daily and monthly expenses, as well as saving for your future. This means that you must do a detailed budget for your current way of life and then work out how much you need to save each month to consistently be able to achieve that level for the rest of your life.
The next step is to figure out if investing is a good option for you. According to a Federal Reserve report, if you have a 401(k) that is heavy in equities or you have corporate stocks, you’re doing well. The average family’s portfolio is now at $340,000.
If you are looking to invest, don’t be hasty. Don’t put yourself or your family in jeopardy. “You should always look at the sensible middle ground of investing,” says President of David Lerner Associates, Martin Walcoe. Get advice from reputable sources once you have worked out what you need to spend and what you think you may be able to save. There are tools online that may be able to help you work out what you need to be saving, such as this retirement calculator.
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.
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