If someone were to ask you questions about how you were going to fund your retirement, really fund your life after your regular working pay check stops, how would you answer?
Do you have a budget that you stick too? Do you save the maximum amounts in your 401k or SEP or IRA? Do you understand your company plan payout options or do you even have an asset allocation strategy?
The more you read and the more you listen the more you realize how poorly prepared most of the Baby Boomers are. Since the average retirement age in the United States is 57 years old-then can you assume that those people have $1.5 Million in saving? Maybe. Maybe not. And do we really need that much to live on? That may depend on how long you plan on living and what kind of lifestyle you plan on having.
Chronologically, we are living longer and longer which we can assume means we need to accrue more money. According to Shripad Tuljapurkar, a Stanford University biology and demographics professor, we could easily see American's average life expectancy in the near future to increase from just under 80 years to 100 years.
The implications of these additional years of life are staggering. Society will need to be prepared for this in ways that we may not even understand yet. Would it seem necessary to increase the retirement age from 65 to say 80 or 85 years? What does it mean for Social Security? If you are an optimist; think of all the wonderful careers you could have! If you are a pessimist this might not be such an exciting proposition.
Furthermore, Tuljapurkar predicts that with all the anti-aging technology already available our lives could increase 1 year every year beginning in 2010. By 2030, the average life expectancy in most industrial nations could be 100 years old. Professor Tuljapurkar doesn't see this population as infirmed or sickly, but as physically, mentally and socially active as many of our 80 years olds are today.
Now, back to the frightening topic of how we are going to support ourselves so we are not a burden to our children.
It's clear that if you are in debt, that needs to be dealt with immediately. What is your plan for that? The other piece of this is that you must save at the same time if you plan on living comfortably when you are no longer working and earnings a pay check. Sadly, in this country, our average savings are at a negative .5%. The only time this number has ever been this low is during the Great Depression. We are not saving and the payback may affect us more than we wish to acknowledge.
The bottom line is we need to continue to save at the same time as we pay off debt. It's not as impossible as it sounds and the price you pay for not doing so could be enormous.
Another hard truth is that even if we work, hopefully at something we truly enjoy, it will feel much better if it's because we want to and not to put food on the table.
So, could you pass a Retirement Exam?
Author Resource:-
Kim Kirmmse Toth is a certified life coach. She works with baby boomers on the many transitions faced including the non-financial side of retirement planning. She may be contacted at: kim@myretirementbydesign.com or at her website: http://www.myretirementbydesign.com
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