With increased life expectancy, early retirement dreams, and changing population demographics, the nature of retirement has changed dramatically. But one thing remains the same: people often underestimate the need to save for this next stage of their life.
A recent analysis by the Economic Policy Institute revealed that the average couple has $5,000 saved for retirement — well below what they will need to maintain their standard of living when they stop earning a regular income.
Still need convincing that retirement saving should be a priority? Our Resource of the Month makes a compelling case for why retirement planning, with the help of a well-informed professional, is a must for everyone.
Congratulations on making it through April and the ever-busy tax season! It’s hard to believe that 2015 is almost half over, but in a few months we’ll be talking year-end wrap ups and 2016 planning. Before the year gets away from us, the Robin Weingast & Associates team wants to focus on an important, time-sensitive topic that impacts everyone: timely retirement planning.
The general rule of thumb is that earlier is better when it comes to retirement planning. But that’s not always an easy rule to follow. Just last month, expert testimony to the US Senate’s Special Committee on Aging revealed that “nearly half (45%) of Americans have no retirement savings…[and] the median retirement-account balance is only $3,000 for working-age households and only $12,000 for households approaching retirement. In two-thirds of working households with earners between ages 55 and 64 years, at least one earner has saved less than one year’s income for retirement.”
If you suspect that you – or your employees – are unprepared for retirement, there are things you can take to get on track. Before you can properly plan, you need to understand where you actually stand. This is the most important step you can take, because it will determine what comes next for your retirement planning. Use this tool from the AARP; it compiles information about you, your spouse, and your current savings and projects what you will need for retirement and if you’re prepared.
Based on what you find out, it’s time to make some potentially tough decisions. Think about where you can trim expenses and how you can cut down on more significant costs – are you at the stage in life where you can downsize your home or apartment? If you need to make significant decreases to your monthly expenses, try using a tool like this, which walks through standard monthly expenses and gives you tips on how to cut costs. Also consider if you’re maximizing your earning potential. Are there part-time or freelance opportunities that can help you close the gap?
A key part of catching up is making sure you understand your current retirement plan and making sure you’re taking full advantage of what’s available to you. Whether you’re an employee who isn’t fully aware of what retirement benefits your company offers, or a manager who wants to make sure your team understands the full details of a retirement plan, it’s wise to keep the lines of communication open. Schedule regular meetings with HR to make sure that you’re making the most beneficial choices.
Having a team always helps. You can count on the Robin S. Weingast & Associates team for the most effective retirement planning strategies at any stage. Contact us today to see how we can help achieve your goals.