Lack Of a Dependable Income Source

Baby Boomers are in a retirement readiness crisis and are “overwhelmed” when it comes to retirement, according to the “Reclaiming the Future” study released by Allianz. Nearly a third (32%) of those surveyed reported they felt overwhelmed and concerned about financial security and retirement planning. They lack confidence in their ability to put together a strategy for their financial needs in retirement and are depending heavily on Social Security for THEIR retirement income. One-third of people ages 44 – 75 are largely unsure of WHEN or IF they’ll be able to retire. The study concluded that there are 3 distinctive challenges that have the greatest impact on the retirement unpreparedness of the boomer generation.

First, is the lack of a dependable income source. The once reliable “defined benefit plans” and government entitlement programs are becoming increasingly undependable. According to a recent report by Cogent Research, a leading research firm in the financial services industry, only 1 in 5 pension plans report they are prepared to MEET their financial obligations to plan participants. Social Security and Medicare are continuing to run at deficits, with no immediate or agreed-upon plan for reorganizing or correcting their financial instabilities.

Second is increasing life expectancies. In America, the average life expectancy is 78 years, and with this increased longevity comes the need to SAVE more now to AFFORD more later. The survey found that more Americans fear outliving their MONEY, than they fear DEATH. When Social Security was first introduced in 1935, the average life expectancy was only 61, and the age to receive social security benefits was 65. Now, the retirement age remains the same, and even earlier in some cases, but the INCREASED life expectancy today is allowing many Americans to live 15, 20 even 30-years in retirement, and putting more retirees at RISK of outliving their retirement savings than ever before!

And lastly, the survey found that personal responsibility for retirement savings is making retirees more vulnerable to market volatility. Unfortunetly, MORE responsibility for retirement savings is making more Americans LESS likely to SAVE for retirement. According to the most recent “Retirement Confidence Survey,” a quarter of all U.S. households have just $1,000 put away in savings and investments, and just a little over HALF of American households have ONLY saved up to $25,000.

Ok, so you may be asking yourself, “Matt, what does all of this mean to me?” Now that we’ve “checked” the facts, let’s “balance” this news using our Checks and Balances process to determine what actio
YOU should take TODAY.