In April 2010, a study done by Merrill Lynch found that 73% of people over 51 are concerned that their retirement assets won’t last as long as they will. But, a pre-2007 survey conducted for the National Summit on Retirement Savings held in Washington, D. C. revealed that 70% of people said they were confident they’d have enough money to live comfortably in retirement. Interesting what a few years will do to perspective.
More interesting still is that of that group surveyed pre-2007, half reported having saved less than $50,000 and 15% said they have not saved anything! And to confirm, a Yale study discovered that the average retirement plan (think 401k) balance of those over 55 is just $79,200. Woo Hoo!!
Now, we all know what they say about statistics and lies. But, what if there is some truth to these statistics? What if it is true about you? How do you plan to provide for your financial needs in retirement? Are you counting on some windfall? A large inheritance? Or, Heaven forbid, the lottery?
If your faith is in events such as these to provide for your financial future, your faith is probably misplaced. Proverbs 13:11 says that wealth hastily gotten dwindles, but those who gather little by little will increase it.
Surveys suggest you aren’t doing enough, and maybe not anything, to accomplish achieving a level of comfort in your retirement. Is it that the goal seems so overwhelming? Is it that you think you’ll just work forever never foreseeing a day when you’ll be too old and frail – bald-headed (like me) passing the time in a rocking chair, cane resting against the wall only an arm length away?
How about changing your vision of retirement? What if you had the opportunity to work for a non-profit, or a school, but at a lower rate of pay? Could you make that transition? Can you build up the financial resources to take advantage of such an opportunity?
Dr. Robert Butler, head of the National Institute on Aging suggests that time is the ultimate currency and that people who continue to work past retirement age should want more of that as compensation. Wouldn’t it be great to have the flexibility that when you awoke in the morning, if you didn’t feel like going to work, you don’t have to? You are financially independent enough to make that decision.
How are you going to get there?
There is an old riddle of a proverb that goes something like this:
When is the best time to plant a tree? Answer – Twenty years ago.
When is the next best time to plant a tree? Answer – Today.
Now is the time to act – to save and invest for retirement. Faith demands action.
Opportunities abound for putting money away for retirement. An outstanding avenue for retirement savings is your company’s 401k plan. You can defer up to $16,500 of your salary – and more if you are over 50. If you are not contributing to that plan, begin today. If your company does not offer a retirement plan, ask them to consider adding one to your benefits package. There are plenty of products available to large and small employers alike.
Outside of the company you can accumulate funds in personal and retirement accounts such as IRAs and ROTH accounts. Contribution limits allow you to put in as much as $5,000 per year. And if you are over 50, you can add an extra $1,000 per year for a total of $6,000.
A professional financial advisor will help you formulate your vision of retirement. Talk to him or her about your hopes and dreams for your financial future. We will help you create strategies that will put you in a position to achieve your goals. More importantly, we will work with you to monitor your progress and keep you on the right path. Take that step of faith today.