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Will
You Ever Be Able to Retire?
The
federal government and employers are shifting
the duty of
retirement funding from themselves to workers.
How will this affect your future?
 Back
in the Day...
Twenty-somethings often refer to their parents’
youthful years as “back in the day”—and
little do they realize how much things have changed
since then—economically, socially, and politically.
These changes impact every American, but they
are especially relevant to those beginning to
think about target retirement dates and whether
they have saved enough.
“Back
in the day” people worked long enough at
one job that they drew adequate pensions in retirement.
The luckiest (or most visionary) ones are the
“triple dippers” who collect a civil
service or military pension, a pension from years
of working for a private company, and social security.
While
triple-dipping is an enviable way to fund retirement,
at least one dip of the trio is quickly disappearing:
the company pension. Only about 40% of the baby
boom generation, just now beginning to retire,
will have any sort of pension, and the life-long
health insurance benefits that were once part
of nearly every retirement package are for the
most part a thing of the past.
When
the government introduced IRA accounts in 1975,
they seemed like a great way for people to amass
tax-deferred savings, but they are strictly the
responsibility of the individual. You have to
have the money, and you have to hope you’ve
found a good place to invest it.
Six
years later, 401K plans came along. With participating
employers contributing some matching funds, employees
who participate defer taxes on part of their income
and get a literal pay raise from the funds match.
Once again, it sounds like a great idea: So why
are economists worried that America is facing
a retirement crisis?
To
begin with, only a little over half of employees
who are offered a 401K plan actually participate.
Some cash out their plans when they leave, often
because they need the money for living expenses
while they look for another job, or they want
to pay ahead on debts they know they can’t
handle if they aren’t working.
While
some of the non-participants have IRA accounts
or other individual savings plans, an alarming
31% of workers 40 or older admit that they have
not saved anything at all for retirement, according
to a recent AARP Bulletin poll. The same
poll revealed that 28% of those who had already
retired had saved nothing! Like almost
60 percent of current retirees, Social Security
is their major source of income.
“But I still have my pension...right?”
 Wrong.
Many companies have converted pension funds into
401Ks, expecting employees who know little about
the stock market to figure out how to invest for
their futures. Some companies simply fund 401Ks
with 100% company stock. Where does that leave
the employee if the company goes bankrupt—as
Enron did, leaving thousands of employees out
of work and with shares of company stock once
valued at $80 worth less than a dollar?
Where Do You Stand?
If
you participate in an IRA or 401K, by all means
keep doing so. Don’t take out any “loans”
on them. And remember that according to the fed’s
own web site, you should expect Social Security
to replace only about 40% of the income you will
need in retirement. The average couple on social
security receives about $20,000 annually from
the government. According to Bloomberg’s
retirement calculator, this couple needs an
investment portfolio of an estimated $500,000
to make up the other 60% they need ($30,000) to
bring them up to a retirement income of $50,000
a year.
Maybe
this doesn’t worry you. Perhaps you are right
on target. Congratulations! You’re in the
fortunate minority.
But--
more than half of all workers who are over 55
have saved less than $50,000. That amount
is almost insignificant. It will generate only
about $3000 a year—and that’s assuming
a 6% return and no unexpected nose-dives in the
economy.
How
did people get into this fix? There are plenty
of reasons. For one thing, real wages have remained
stagnant since the mid-1970s, meaning that despite
very hard work, many have needed every penny just
to get by. Poor spending habits—the desire
to have it all and have it now—have led others
down the road to debilitating debt. 401Ks and
IRAs are accessible (although you pay taxes and
a penalty). People borrow to pay for college and
medical expenses, and somehow the money never
gets paid back to the retirement fund.
Is
retirement security a luxury you can’t afford?
With
an uncertain economy, skyrocketing healthcare
and energy costs, and little help from employers,
retirement may seem like an impossibility to you.
It
doesn’t have to be that way.
We
are living longer and longer. Must we spend our
retirement years filled with anxiety about outliving
our money? Will we just have to keep working forever?
It
doesn’t have to be that way.
Even
if you are approaching retirement age with little
in the way of savings, there is still time to
make up for the shortfall, relax, and enjoy the
rest of your life.
It’s
all in your hands. But you must be willing to
take control of your finances and turn your life
around.
 As
we said at the beginning of this article, the
responsibility for retirement income is yours
now. The government will help you out a little
bit, but you need to find a way to earn about
60% of what you will need.
There
IS a way.
Even
if you must stay home to take care of an ailing
spouse or aged parent, there IS a way.
There is a business you can run from your home,
your RV, your vacation cottage, even a lounge
chair on a sunny beach. Technological advances
in the past few decades have made it all possible,
and it’s working incredibly well for thousands
of people. To establish a viable business that
will produce income now and for years to come,
all you need is an Internet connection and a telephone.
Skilled professionals who took back their lives
will be happy to teach you the simple secrets
of their success.
Why
haven’t you heard about this before? If you
had, you’d be ahead of the game. But the
important thing is that you know about it now,
and the sooner you act, the sooner you can
begin to free yourself from anxiety about how
to finance your retirement. In fact, you can look
forward to enjoying the rest of your life as you
live out your best years in the security of ever-increasing
wealth.
Take the first
step now. Fill out the form below for free, no-obligation
information.
Sincerely,
Sheri & Ayad
956-627-0503
sheri@havingthetimeofmylifenow.com
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