Can Baby Boomers Afford to Retire? by Robin Trimingham
This past spring a number of agencies have released new statistics regarding the Baby Boomer generation’s overall state of financial preparation for retirement and it’s not a pretty picture.
According to the Transamerica Centre for Retirement Studies, only 25% of retiring Americans plan not to work again when they leave their current place of employment. At least 50% plan to work part of the time but only two out of five is keeping their job skills current, meaning that they will not be able to compete for jobs in their current field and will have to find this desired retirement work in another industry.
If the following data released by USA Today is anything to go by, many retirement age Americans may well be hurtling toward certain financial disaster and have no idea what they may be facing:
· One in four 65-year-olds today will live past age 90, (and1 in 10 will live past age 95)
· One in three Americans has no retirement savings whatsoever
· Over 40% of single seniors 65 and over get at least 90% of their income from Social Security
· Only 51% of Americans are confident they’re saving enough to see them through their retirement
· More than one-third of Americans expect to work in retirement – either to alleviate boredom or because they need the money
· 60% of older Americans live in fear of out living their savings
· Almost 60% of retirees don’t budget for leisure activities when planning for retirement
· The average healthy couple will spend $377,000 on healthcare items not included in their Medicare coverage in retirement
· Nearly 50% of retired households spend more money, not less, in retirement
· Seniors are the fastest-growing group of bankruptcy filers in the country
Obviously, these statistics may be higher or lower depending on the country that you reside in, but the message is clear – it is not possible to save too much or plan too carefully for your retirement.
If you are over age fifty and still in the workforce face up to the fact that you may well have to provide for yourself for another thirty years once you reach the age of sixty-five, and you will most likely need extra money at the very end of your life when you are least able to care for yourself.
Re-evaluate your current lifestyle and look for any way to increase your annual pension contributions by at least 10% (more if possible). Talk your ideas through with a qualified financial planner and come up with a strategy to make it happen.
You might have to give up those daily lattes or a coveted cruise to the Bahamas, but a little short term pain now, is definitely preferable to a long life of poverty and misery later.
By Robin Trimingham