It’s always a good time to talk about retirement planning because many Americans near or at retirement are worried they’ll outlive their money. It’s a legitimate concern. The American Institute of Certified Public Accountants has released a survey of financial planners that tabs running out of retirement money as the top worry of clients. Overall, 41 percent cited retirement funding as their clients’ biggest concern. About 10,000 people in the U.S. retire daily. That’s some four million annually. Many of them are doing so without having planned, acted, or saved sufficiently, for retirement.
The newretirement.com website notes the state of many Americans’ retirement situations: “The average retirement income is probably a lot less than you think. As surprising as it might sound, the average American’s retirement income is barely over $1,500 per month or about $18,000 annually, according to the Pension Rights Center.” The AICPA’s PFP (personal financial planner) Survey also shows that many financial planners’ high-income clients have the same concerns.
The reasons for not being in a good retirement position are legion: spending emergencies, paying for kids’ college, didn’t make enough to save enough, health costs, the economic downturn, the gradual disappearance of private sector pension plans, individuals and families spending on wants rather than saving for needs (such as retirement), and many more.
“Politico,” a publication covering politics, reported Aug. 22 on a Congressional Budget Office report that looked at wealth in the U.S. and found that median family wealth for Americans 50-64 dropped from $250,000 to $150,000 in 2013. Furthermore, in retirement, since people aren’t working, they have more time to spend money. Thus, you may actually spend more in retirement than when you were working.
Here’s a basic primer on retirement planning, particularly important because it’s estimated that only about half of Americans know how much money they’ll need for retirement:
Once you’ve established a retirement fund, leave it alone. Don’t draw on it for anything other than dire emergencies for which there is no other option.
It seems easy to bet that you’ll be able to accumulate tomorrow what you don’t save today. Unfortunately, it’s usually a losing hand.
You can view the original post in the Knoxville News Sentinel here.