|
 |
|
|
Retirement is Coming But Americans Aren’t Ready |
| |
Every year, the Employee Benefit Research Institute (EBRI) conducts a national survey that polls preretirees and retirees about their financial preparation and attitudes toward retirement planning. It may come as no surprise that the latest results indicate that Americans' retirement confidence has rebounded along with a stronger economy, but self-described planning for retirement could use a collective boost.
This year, the EBRI study revealed the following statistics.*
- Many expect to retire later: The percentage of workers who expect to retire after age 65 has tripled, from 11% in 1991 to 33% in 2010.
- Even more have concerns about paying for medical care: More than half (51%) of those surveyed were not confident in their ability to pay for health care during their later years, and 61% questioned their ability to finance long-term care.
- Even basic expenses could be a stretch: Only 33% were very confident in their ability to fund basic expenses during retirement.
- Americans still struggle with low level of savings: More than half (54%) said the value of their savings and investments, excluding home equity and defined benefit plans, was less than $25,000.
- And will rely more on employer-sponsored retirement plans and employment income during retirement: The percentage of workers who expect to receive retirement income from Social Security has declined from 88% in 1991 to 77% in 2010. In contrast, the percentage that anticipates income from a job increased from 70% in 2005 to 77% in 2010 and the percentage that expects income from an employer-sponsored retirement plan increased from 69% to 75% during the same period.
- There is still little awareness of how much needs to be saved: Less than half (46%) of workers indicated that they or their spouse have tried to calculate how much they would need to save prior to retirement in order to live comfortably during their later years.
- Guaranteed income products are not in the mainstream: Less than half (46%) of preretirees are very or somewhat confident that they will purchase a financial product or select a retirement plan option that pays them guaranteed income each month for the rest of their lives. Only 14% of current retirees have elected this option.
Don't Be a Statistic
Admittedly, the survey results can be a downer, but it's important to realize that in your personal preparation, you don't have to become another statistic. Try to think about what you can do, prior to retirement, to live comfortably during your later years.
- If you are working and have access to an employer-sponsored retirement plan, try to contribute as much as you can afford. For 401(k) and 403(b) plans, the maximum annual employee contribution in 2010 is $16,500. Workers aged 50 and older can contribute an additional $5,500. Keep in mind that these are federal maximums and your employer can impose lower limits.
- If you do not have access to an employer-sponsored plan, or already contribute the maximum, consider funding an IRA. The maximum contribution for 2010 is $5,000 plus an additional $1,000 for investors aged 50 and older.
- Your financial advisor can help you determine how much you need to invest prior to retirement to live comfortably during your later years. Having a retirement savings goal may help you stay focused on how much you need to accumulate and what you need to do to pursue your goal.
*Source: 2010 Retirement Confidence Survey, EBRI, April 2010.
©2010 Standard & Poor's Financial Communications. All rights reserved
©2010, Kelly Ruggles, Spokane, WA. Web site
Kelly C. Ruggles, Spokane, WA. is a fee-based financial planner located in Spokane.
Kelly C. Ruggles, Spokane, WA. President of American Reliance Group, Inc., a registered investment advisor.
Kelly Ruggles, Spokane, WA. is the author of "The Financial Playbook" for Retirement
Kelly C. Ruggles, Spokane, WA. Does not intend to provide personalized investment advice through this publication and does not represent the strategies or services discussed are suitable for any investor. Investors should consult with their financial advisors prior to making any investment decisions
|
|
|
|
