Recent studies and surveys show that pre-retirees and retirees fear these five threats to their retirement finances most – and with good reason. Which of these keep you up at night?
Retirement Security Threat #1: Outliving Your Money
This is such a big and scary threat that some people say they would rather die before their time than run out of money.
Unfortunately, the likelihood of outliving your money is all too real. The average 65-year-old will outlive their savings by almost a decade, according to a recent study by the World Economic Forum.
To determine how much money you’ll need to have saved by the time you retire, a good guideline is the “Rule of 25,” which says you should multiply your total annual expenses by 25. By that measure, to have $100,000 per year (don’t forget to adjust for inflation) to spend in retirement, you’ll need to save $2.5 million.
It’s also important to consider that you may well live longer than you imagine, and studies show people tend to underestimate their life expectancy.
Retirement Security Threat #2: Market Risk
[Read more…] “The 5 Biggest Threats to Your Retirement Security Today”
52% of American households are at risk of not being able to maintain their standard of living in retirement – even when factoring in potential proceeds of a reverse mortgage.
That’s according to the Center for Retirement Research at Boston College.
Let’s take a look at three critical reasons for that… and what you must do now to protect yourself…
Problem #1: People continue to live longer, but aren’t working longer
According to the Social Security Administration, 25% of people turning 65 today will live past 90, and one out of ten will live past 95, yet most financial planners base their projections of how much money you’ll need on your living to age 85 or so.
What if you’re one of the lucky ones who hangs on until 100 or longer? And just how “lucky” will you feel if you can’t provide for yourself during those final years?
Solution: Assume you’ll live to at last age 100 when determining how long your money will need to last you.
Problem #2: Underestimating health-care and long-term care costs in retirement
The numbers are shocking, and almost no one is accurately accounting for this: A 65-year-old couple retiring now will need $245,000 just to cover out-of-pocket health-care costs during retirement, PLUS another $255,000 to cover one average stay for one person in a nursing home.
Whoa! That’s half a million dollars you’ll need just for medical care… but most people close to retirement don’t even have that much in total retirement savings. [Read more…] “52% of Americans Will Have to Reduce Their Lifestyle in Retirement”
How do you think you compare to other people when it comes to how much you’ve saved for retirement?
The results of a new survey from the Employee Benefit Research Institute (EBRI) reveal some surprising insights into America’s preparedness for retirement.
Read on for the highlights of the 2016 Retirement Confidence Survey and a 6-Step Action Blueprint to make sure your money lasts as long as you do…
The survey revealed that 54% of all workers report less than $25,000 in household savings and investments, excluding the value of their primary home.
That includes 26% who say they have less than $1,000 in savings.
10% have between $25,000-$49,999 saved, 10% have between $50,000 and $99,999 saved, and 12% have between $100,000-$249,999.
And how many have saved $250,000 or more? Just 14%.
Are people close to retirement any better prepared?
[Read more…] “Do You Have As Much Saved for Retirement As the Average Person?”