Why is retirement confidence hitting all-time lows?
- Americans are living longer.
- Employment worries and delayed retirements.
- Worries about Social Security and Medicare Benefits and Costs.
- Lack of growth in Retirement Accounts.
The report is trending toward a delay in workers retirement date, citing the economy (22%) and lack of faith in Social Security and Government (19%) as the top reasons. The trend is heading back to the all time high, as seen in 2009 after the credit crisis. A downturn in the stock market could again force soon-to-be retirees into a holding pattern. The report does not address the current low yield environment but does point out that only 42% of retirees feel confident that their retirement account will grow.
Expenses, Expenses, Expenses.....
The baby boomers are leaving the workforce in record numbers, estimated at 10,000 per day. The EBRI report is pointing out that many have not identified the true cost in retirement. The survey indicated that only 67% now feel they can confidently meet basic expenses in retirement, down from 80% last year. The numbers are similar in the estimation of covering the cost of medical expenses, down 4% from the high of 71% in 2012. Long term care cost seem to be the elephant in the room, with only 44% confident they have this problem covered in retirement.
Failure to Plan is a Plan to Fail
Only 23 percent of workers and 28 percent of retirees report they have obtained advise from a professional advisor who was paid through fees or commissions. Of these workers, 27% followed all of the advise, but more disregard some of it and followed most (41%) or some(27%). If this pattern was similar to following the advise of a doctor, retirement income would not be a big issue for most. Take the time to consult professional advisors. Baby boomers have to plan for 25-30 years of guaranteed income, most not having defined benefit (pension) plan, debt free home, and inflation protected savings.
- 45- 55 year old workers should be creating a supplemental income to Social Security, remember 2033 is coming and it is YOUR problem.
- 55-60 year old workers should have an expense and income plan in place and in conservative investment or annuity programs.
- 60-66 year old pre- retirees should have a housing plan, health care plan, income plan, Social Security Plan, LTC plan, tax plan, transition plan, and the important distribution plan.
- 66 plus - Follow the plan, if any questions, follow the plan! Enjoy!
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