Preparing for retirement requires careful planning


Published on

To learn more about saving for retirement and how invest conservatively for the long haul please visit:

  • Be the first to comment

  • Be the first to like this

Preparing for retirement requires careful planning

  1. 1. ==== ====Learn about how to save for retirement and get access to a millionaire by retirement Excelspreadsheet at: ====With the baby boomer generation quickly making its way toward retirement, there are some issuesthat pre-retirees should be concerned with addressing before saying good-bye to their employers.Long retirement periodWhen Social Security was first established, most retirees didnt live long after terminating theemployment. But over the years, our life expectancy has increased significantly.People in their 60s can expect to live an average of 20 years or more in retirement. Once wereach our 70s, the chances of making it to 90 or even 100 are greatly increased. Therefore, weneed to make sure that our retirement nest egg is sufficient to cover a long and comfortableretirement.Funding retirementWhile we know that we need a big nest egg, we should give some thought to the sources that willprovide those funds. Traditionally, retirement was funded by pensions, Social Security, andsavings. However, times have changed.Pensions have become a thing of the past. More and more companies are eliminating pensionplans and adopting retirement plans that depend more on employee contributions. Many pensionplans have become insolvent, leaving retirees with only a fraction of the income they expected.We cannot rely on Social Security, either. Although many Americans currently rely on SocialSecurity for a large portion of their retirement income, future retirees should prepare a back-upplan. Unless changes are made to the current system, the Social Security Administrationestimates that benefits for all retirees could be cut by 26 percent by the year 2040.Savings needs to become a priority. Most Americans spend more than we make. If we continue tooperate this way, retirement will look extremely bleak for many of us.How much will it take?It is hard to get a clear picture of exactly what it will take to ensure a comfortable retirement.However, it is better to prepare as much as possible. We also need to make sure to account forinflation in any calculations that we do.For example, if you plan on having a $5,000 per month retirement income, keep in mind that,
  2. 2. based on a 3% annual inflation rate, 10 years from now you will need $6,700 per month. In 20years, it will take $9,000 per month to maintain that same standard of living.Rising health care costs should also be included as part of retirement income. If your employersretirement package does not include full medical coverage for life, expect to pick up where ourunderfunded Medicare plan leaves off. According to the Social Security Administration, Medicareis in a much worse financial position than Social Security.Reevaluate nowThe way we handle our finances requires a changed attitude. There is no better time than thepresent to make sure that you are on the right track to a comfortable retirement. The sooner youare able to correct your current course of action, the better it will be for you financially.Ozeme J. Bonnette is a financial coach, speaker, and author of Get What Belongs to You: AChristian Guide to Managing Your Finances. After working for a top financial services company,she shifted her focus to speaking to groups hoping to increase financial literacy. She earned 3Bachelors degrees at Fresno State, and her MBA at UCLAs Anderson School. Her blog is Reach her at Source: ====Learn about how to save for retirement and get access to a millionaire by retirement Excelspreadsheet at: ====