Can
You Afford to Retire?
You
hear it from every
segment of the media:
The Baby Boomer
generation is quickly
becoming the "retirement
generation."
While some boomers
- defined as those
born between 1946
and 1964 - have
already retired,
most are still working
and wondering when
(or if) they'll
be able to retire.
There
is another segment
of the population,
those younger than
the "baby boomer"
generation, who
live in an entirely
different work landscape
- a landscape where
job security and
working for a single
company for 30 years
and retiring with
a pension is a thing
of the past.
The
federal government's
own social security
web site states
that most retirees
will need about
70% of their pre-retirement
income to maintain
the same lifestyle.
Yet Social Security
replaces on average
only 40%. That
means you better
have an impressive
portfolio of savings
and investments
ready to make up
the shortfall.
The
Government Accounting
Office estimates
that an average-income
couple who receives
$20,000 annually
from Social Security
at age 62 needs
investments of over
$500,000 to bring
their annual retirement
income up to $46,000.
Do
you have a portfolio
of $500,000?
Okay,
so you can probably
manage to live on
less than $46,000.
But here is some
not-so-good news.
Stan Hinden, in
the September, 2006,
AARP Bulletin
reports that more
than half of workers
55 and over state
they've saved less
than $50,000 for
retirement. How
can that be?
- People
in today's environment
have not followed
in their parents'
footsteps of
staying in one
job forever.
Many of us have
changed careers
a number of
times, sometimes
for better pay,
sometimes because
we got downsized
or outsourced.
Unfortunately,
changing jobs
frequently means
we've missed
out on becoming
fully vested
in some of our
employers' 401K
plans.
Our payouts
or rollovers
have been tiny
or nonexistent
- Some
of our lives
took turns we
never imagined.
We've been overwhelmed
by large medical
expenses for
ourselves, our
children, or
our elderly
parents. These
kinds of expenses
can be real
retirement-wreckers.
We may have
little more
than a few thousand
dollars left.
- Changes
like divorce
often mean retirement
savings, even
company retirement
plans, are split
between spouses.
When you say
good-bye to
a relationship,
you say good-bye
to half the
money in your
retirement plan,
and you have
to work hard
and fast to
play catch-up.
- We
wanted our kids
to have college
educations.
We borrowed
from our 401Ks
to finance ever-escalating
college costs.
- Some
of us had to
drop out of
the workforce
altogether to
care for elderly
parents or grandchildren.
- Some
of us are overextended
due to poor
spending habits.
Struggling to
pay off credit
cards leaves
little for retirement
savings.
- Some
of us have just
plain worked
hard our whole
lives and budgeted
carefully, but
have never had
much of anything
left over to
save.
- There
has been no
increase in
real wages-that
is, purchasing
power-since
the mid-70s.
Despite the
happy faces
on TV, a lot
of us are still
struggling just
to get by.
Not
too long ago, people
worked for one company
for most of their
adult lives, faithfully
putting in their
time and counting
the years until
they could retire
and start to enjoy
life. The company
pension was one
reason people stayed
at jobs they didn't
even like. "At
least," they
thought, "the
company will take
care of me when
I'm old. I won't
have to worry."
A
recent trend is
for major companies
to reduce retirement
benefits to workers
who believed the
company would be
there for them in
their retirement
years. Cuts in post-retirement
health insurance
benefits are the
most unpredictable
and the most worrisome
for people who are
entering their 60s.
The few people who
even qualify for
such programs find
that the initial
modest premiums
and co-pays for
themselves and their
spouses have skyrocketed
to the point where
they are simply
unaffordable. And
by the way, Medicare
doesn't cover dental
or vision care.
People can buy separate
policies for these,
but the coverage
is usually meager.
Then
there's the longevity
"problem."
As we live longer
and longer, our
retirement dollars
must stretch further.
What if we run out
of money? What if
we're old and sick
and poor?
As
many companies convert
employee pension
funds into "cash
balance" plans,
retiring employees
are given lump sums
- the money you've
accumulated in your
pension plan or
401K. At that point,
you're on your own
to create a "do-it-yourself"
pension.
You
could take a crash
course in investment
planning. You could
hope you'll find
a trustworthy financial
advisor, but there
is no way to be
100% confident about
putting your financial
future in the hands
of someone you barely
know. Either way,
it's difficult to
feel really secure
about your financial
future in retirement,
and the chances
are you can't afford
to lose a bit of
your nest egg to
bad investments.
Quite
simply, neither
today's nor tomorrow's
retirees can afford
the luxury of feeling
secure.
By
now, you've probably
figured out where
your retirement
prospects fall among
all these possibilities.
You might be
wondering if you'll
ever be able to
retire, or if you'll
have to just keep
working for the
rest of your life.
Yes, it's challenging.
Yes, it's scary.
But
there IS
an answer. Instead
of letting other
people determine
how you will spend
your "golden
years," you
can take charge
of your life now.
It
doesn't matter
if you must stay
home to take care
of a spouse, parent,
or child. It
doesn't matter
where you live.
It doesn't matter
if you're one of
the many who has
not saved enough
for retirement.
Even if your love
to travel, you can
establish and build
a business using
just the Internet
and a telephone.
Successful professionals
will teach you how
to stop trudging
along on the worry
treadmill and start
speeding down the
road to success.
You will be amazed
at how quickly you
can turn your life
around!
The
sooner you get started,
the sooner you can
stop worrying about
an uncertain financial
future and let yourself
think about all
the wonderful possibilities
of a truly secure
retirement. It's
your life, and you
should be the one
controlling it.
Take the first step
today by filling
out the form below
for more information.
