The Wall Street Journal recently published an article dubbing many of today’s preretirees the “Ostrich Generation” – observing that folks are sticking their heads in the sand instead of proactively working on a retirement plan. In fact, according to the Employee Benefit Research Institute (EBRI), only 42% of Americans report that they’ve tried to calculate how much money they will need to save for retirement. It’s no wonder, of course, given the volatility in the stock market, low interest rates in the bond market, and the general state of the economy.
However, it does seem that now is a good time for folks to at least figure out how much money they’ll need to live on in retirement, and perhaps take a close look at all the retirement income strategies currently available. The current state won’t last forever – but similar situations may come around again before you retire – so it’s a good idea to take today’s lessons and apply them to help protect yourself from another financial retreat in the future. Like during retirement.
(CLICK HERE to read “Don’t Join the Ostrich Generation” at The Wall Street Journal, September 17, 2011)
(CLICK HERE for highlights of the EBRI’s 2011 Retirement Confidence Survey, March, 2011)
Experience shows that the more we learn about something, the more confident we grow about that area. Even though figuring out how much you will need may feel like an insurmountable number, the empowerment of the exercise may encourage you to become proactive. For instance, there are several strategies you can employ right now that don’t require that you invest for future growth. Many of these are outlined in the referenced Wall Street Journal article, such as:
- Planning to work part-time during retirement – which can also help you stay active and engaged
- Purchasing a long-term care policy – premiums are cheaper the earlier you buy a policy
- Delaying Social Security – if you will soon be eligible for benefits, wait until age 70 and you’ll receive 132% of the full retirement age monthly benefit
- Social Security selectivity – live on one spouse’s benefit and let the other’s kick in later at the higher percentage to help out with the rising cost of living and later-in-life health care costs
The point is, there is something you can do now: Make a plan. Granted, you’ll need to continue tweaking that financial plan for the rest of your life because things change – as we all well know. But the mere process of creating a financial plan is empowering in and of itself. It can help you feel more positive about the future – and your ability to have an impact on even unforeseen events. Creating a plan can also be more motivating than you might expect – finding areas to cut back in current living expenses and redirecting those funds towards your retirement.
Please contact me if you feel that you, too, might have had your head in the sand too long. I’d be happy to help you review your current strategy and create a sound approach for your future retirement.