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Retirement Is Coming Sooner Than You Think

Feb 7, 2008
The first baby boomer has claimed social security benefits, which should be an eye opener for all of us. Specifically, the issue is retirement planning. Few of us do enough of it as the following facts and tidbits reveal.

If your employer offers a tax-sheltered savings plan, such as a 401(k), sign up and contribute all you can. Your taxes will be lower, your company may kick in more, and automatic deductions make it easy.

Experts estimate that you'll need about 70 percent of your pre-retirement income - lower earners, 90 percent or more - to maintain your standard of living when you stop working. Take charge of your financial future.

Women represent 58 percent of all Social Security beneficiaries age 62 and older and approximately 71 percent of all beneficiaries age 85 and older.

Today, only 42 percent of Americans have calculated how much they need to save for retirement. Have you?

The average American spends 18 years in retirement. Yes, your money has to hold out that long.

Of the 60 million wage and salaried women working in the United States as of March 2005, just 47 percent participated in a retirement plan. Remember, even small amounts can earn interest and add up over time.

To get equity out of your home, you might consider a reverse mortgage. Don't! They are bad deals. Talk with a financial planner about other alternatives that make more sense.

Earnings compound over time, so start investing as soon as humanely possible. This is true even if the amount you are saving is small.

For the average worker Social Security replaces only about 40% of pre-retirement income, the balance must come from pensions and savings and investments.

Your social security statement should come to you each year around your birthday. If it does not, contact the agency to update your address.

Planning on living on your social security check? The average worker check in 2009 is estimated to be just over 1,000 a month. Is that enough?

Instead of blowing a tax refund, have the IRS deposit it directly into your IRA or retirement account.

If you have a lump sum of cash to contribute to an IRA, go with a Roth IRA. Why? You will get the distributions tax-free.

If you plan to work after your retirement age, keep in mind that you might not be able to. Why? Your health could leave you. If that happens, will you have saved enough money?

You have until April 15, 2008, to make your IRA contribution for the previous tax year.

Do you have enough money to retire comfortably? You will never know for sure, so you need to save more than you expect to need. The difference between living on a couple thousand dollars a month and five times that is huge.
About the Author
Barry Waxler is a financial advisor with UFCAmerica.com.
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