-How to create your own rock solid retirement plan
Below are excerpts of the full report:
Let’s face it; the rules of retirement have changed. What we were told to do 30, 20 even 10 years ago now seems like a pipe dream. “Be loyal to a company and you’ll get a pension. Save a little money in a 401k and buy a house. When it’s time to retire your investments and your home will have grown many times over, so you’ll have plenty of money” we were told …”plus Social Security will always be there for you, too!” Perhaps we were sold a bill of goods or maybe it is the natural order of things, but one thing is for certain: the rules have definitely changed and it’s time to take the risk out of retirement and take control of your finances…because you can’t count on Social Security being there for you.
With pensions nothing more than a fading memory for most, 401k’s that are now 201k’s, Social Security turning to dust before our very eyes and the home we were going to sell into retirement for a big profit now a veritable pipe dream, it is time for investors to take control of their financial future. A combination of unpredictable markets, the erosion of defined benefit plans, the uncertainty about Social Security, and longer life expectancies means a new paradigm is upon us in retirement planning challenging the long-held beliefs in financial planning.
In 1939, before America entered World War II, life expectancy was just over 59 for men and slightly above 63 for women. This means that when Social Security was implemented with an eligibility age of 65, the average American would not live long enough to access the benefit. Gee thanks, Uncle Sam! With life expectancies climbing fast and medical advances extending life longer every day, you had better plan to spend a whole lot of time in retirement, and you don’t need me to tell you that you don’t want to do it without any money!
Whether most people lack the resources or are simply unwilling to face the realities of what it will take to retire comfortably, most retirees are not ready for the leap. Every year, more and more Americans move toward retirement with insufficient savings, and with this the country is moving into dangerous territory. People are living longer these days, a lot longer. Now when I plan retirement income distributions for a couple I have to calculate the expectation that one of them will reach the age of 95. Considering that people over age 65 spend four times as much on healthcare, and that end-of-life care can eat up approximately 80% of your assets, every American had better recalculate their retirement planning strategy, regardless of whether you are already retired or planning to.
Will you have enough to retire?
The problem is that people fail to make a provision even remotely adequate for maintaining their pre-retirement lifestyle…