Retirement will hopefully be a time when you are relaxed and living free. But how much do you need to save for retirement in order to live as you envision?
Once upon a time, the majority of middle-income Americans who reached retirement age looked forward to maintaining their lifestyles with a combination of Social Security, company pensions and their own hard-earned savings. Above all, most of those retirees were concerned about leaving an inheritance to the next generation. For decades, Social Security and company pensions helped most retirees to realize their goals.
Today, with more Baby Boomers approaching retirement in a hobbled economy, many Americans are concerned about outliving their money.
Social Security records reveal that the average age for Americans to claim benefits is 63.9. In reality, many are working longer than that because they need the money. According to the Bureau of Labor Statistics, the percentage of workers over age 65 is increasing faster than any other age group.
The traditional save-and-spend formula must be reformulated to accommodate new economic realities.
“Workers misunderstand what their primary sources of income will be in retirement” says State Farm Insurance Spokesperson, Angie Rinock. “They may be disappointed when trying to live on an income that’s available.”
To create revenue streams themselves, many Baby Boomers are seeking professional advice. There are several courses of action for a successful retirement.
- Begin to handle debt and decrease spending
- A delayed retirement will increase Social Security benefits
- Figure Social Security benefits so that you have a better idea of your retirement needs because your earnings that may increase can change benefit status
- Retirement estimators are available online
- Understand how benefits can be affected by lifestyle and types of employment
- Save more aggressively and recreate lost income streams
- Focus on stocks, real estate portfolios and pension
- Build IRA’s annuities and research life insurance products
It is important to plan now because even with the best intentions, accidents and the unexpected can not be dismissed. Take advantage of any steps that can truly provide a golden retirement.