Retirering?
Will You Ever Be Able to Retire?
Both the federal government and employers are shifting the responsibility of retirement funding from themselves to workers. Will this affect your future too?
Way back when…..
Those in their twenties often refer to their parents’ youthful years as “way back when” or “back in the day”. Little do they realize how much things have changed since —economically, socially, and politically. These changes affect every American, but they are especially relevant to those starting to think about their retirement and, subsequently, whether they have saved enough.
“Way back when” people worked long enough at one job in order to draw a sufficient pension in retirement. The most fortunate (or most far-sighted) are those who “triple dipped” and who collect a civil service or military pension, a pension from years of working for a private company, in addition to social security. While triple-dipping is an enviable way to fund retirement, at least one of the three dips is disappearing quickly: the company pension. Less than half of the baby boom generation, just now beginning to retire, will have a pension of any kind, and the life-long health insurance benefits that were once part of nearly every retirement package are, for the most part, a thing of the past.
With the government’s introduction of IRA accounts in 1975, many felt it was a great way to collect tax-deferred savings. However, they are strictly the responsibility of the individual. You have to have the money, and you have to hope you’ve found a good place to invest it. At the beginning of the 1980’s came the introduction of the 401k plan. With those employers who participated contributing matching funds, employees who participated deferred taxes on part of their income and received a literal pay raise from the match of funds. As ever, it sounded like a great idea: Why, then, are economists worried that America is facing a retirement crisis?
For starters, little over half of employees who are offered a 401K plan actually take up the offer. Some cash out their plans when they leave, often because they need the money for living expenses while they look for another job, or they want to pay ahead on debts they know they won’t be able to contend with if they’re unemployed.
While some of the non-participants have IRA accounts or other individual savings plans, according to a recent AARP Bulletin poll, an alarming 31% of workers 40 or older admit to having not saved anything at all for retirement. The same poll revealed that 28% of those who had already retired had saved nothing! Like almost 60 percent of current retirees, Social Security is their major source of income.
“But I still have my pension…right?”
Not necessarily. Many companies have converted pension funds into 401Ks, expecting employees who know little about the stock market to figure out how to invest for their futures. Some companies simply fund 401Ks with 100% company stock. Where does that leave the employee if the company goes bankrupt—as Enron did, leaving thousands of employees out of work and with shares of company stock once valued at $80 worth less than a dollar?
Where do I fit in to all this?
If you contribute to an IRA or 401K, adbsolutely keep doing so. Don’t take out anything on them, a loan for instance. Don’t forget that according to the federal government’s own web site, you should expect Social Security to replace no more than about 40% of the income you will need in retirement. The average couple on social security receives about $20,000 per year from the government. According to Bloomberg’s retirement calculator, that couple needs an investment portfolio of an estimated $500,000 to make up the other 60% they need ($30,000) to bring them up to a retirement income of $50,000 a year.
Maybe you’renot unduly bothered. Maybe you’re right on target. Congratulations! You’re in the fortunate minority.
However, more than half of all those over the age of 55 who are still working have saved less than $50,000. That amount is almost insignificant. It will generate only about $3000 per year—and that’s assuming a 6% return and no unexpected downturns in the economy. How did people get into this mess? There are a great number of reasons. Firstly, actual wages have remained stagnant since the mid-1970s, meaning that despite very hard work, many have needed every penny just to get by. Poor spending habits— the easy-come-easy-go desire to have it all and have it now—have led others down the road to debilitating debt. 401Ks and IRAs are accessible (though you pay taxes and a redemption penalty). People borrow heavily to pay for college and medical expenses, and somehow the money is never paid back to the retirement fund.
Is retirement security a luxury you can’t afford?
With an uncertain economy, mounting healthcare and the rising cost of energy, coupled with little help from employers, retirement may seem an impossibility. It needn’t be. People are living longer and longer. Why should we resign ourselvesto spend our retirement years riddled with anxiety about outliving our money? Will we have to keep working forever?
It doesn’t have to be like that.
Whether or not you are approaching retirement age with little in the way of savings, there is still time to make up for the shortfall, relax, and enjoy the rest of your life. It’s up to you and all in your hands. There’s only one but – you have to be willing to take control of your finances and turn your life around.
As mentioned at the beginning of this article, the responsibility for retirement income is now yours. The government will help you out a little bit, but you need to find a way to earn about 60% of what you will need.
There IS a way.
Even if you’re obliged to stay home to take care of an ailing loved one, there IS a way. There is a business you can run from your home, your motorhome, your vacation house, even a deckchair on a beach. Advances in technology in recent years have made it all possible. So possible, in fact, that it’s working incredibly well for thousands of people from all aspects of life and from all over the nation. To establish a lucrative and legitimate business that will generate income now and for the years ahead, you simply need an Internet connection and a telephone. That’s it! Our team of skilled professionals who reclaimed their lives will be happy to teach you the simple secrets of their success.
Are you wondering why haven’t you heard about this before? You’d be ahead of the game if you had. The important thing is that you know about it now. So, the sooner you act, the sooner you can start freeing yourself from the stress of how to finance your retirement. As a matter of fact, you can start to look forward to enjoying the rest of your life as you live out your best years in the security of ever-increasing wealth.
Take the first step now. Complete the form on this page for free, no-obligation information.