Ask ten different people about retirement planning, and you are likely to receive ten different viewpoints. However, there is one idea most of us seem to have in common: Nearly 80 percent of Americans believe they will face greater challenges in achieving financial security in retirement, as compared to the previous generation (according to a study by the TransAmerica Center for Retirement).
Why do they feel this way? The reasons might vary from one individual to the next, but the following four challenges are common ones that affect most of us. Will they affect you?
Longer lifespans. We’re all expected to live longer than previous generations did. Today, a 65-year-old person has a one in four chance of living past age 90. A longer life means a greater need for stable retirement income.
Debt. Recent figures suggest that American consumers carry, collectively, over one trillion dollars in debt. Student loans and mortgages are a part of that, but credit card debt is also a major factor. If you carry revolving, high-interest debts into retirement, those payments will impact your budget.
The cost of healthcare. Most employers are dropping, or scaling back, healthcare benefits for retirees. Yes, you will qualify for Medicare when you turn 65, but you will still face out-of-pocket costs. In fact, a recent estimate by Fidelity states that the average 65-year-old couple retiring this year will spend $275,000 on healthcare over the course of their retirement years.
Pensions are a thing of the past. In 1998, 59 percent of Fortune 500 companies offered pensions to their workers. Now, that number has dropped to only 20 percent. You might not enjoy any form of guaranteed retirement income, other than Social Security (which will not be enough to fund your entire retirement).
Clearly, the responsibility for generating retirement income falls to each individual. But because half of all Americans aren’t even offered a qualified retirement plan through their employers, that leaves a lot of people looking for their own answers.
We can help with that. Give us a call, and we’ll review various retirement funding options with you. With a comprehensive plan in place, you can overcome these retirement challenges and put together an income plan for your future.