How to Take Charge of Your Retirement Prospects

While 69% of workers are confident they will be able to fully retire with a comfortable lifestyle, just three in 10 actually have a written financial strategy for retirement, according to the 22nd Annual Transamerica Retirement Survey.

Despite the confidence, 63% of workers agree with the statement, “I do not know as much as I should about retirement investing.”

Preparing financially for retirement requires dedication, planning and education on your options and what you will need to retire and maintain your current lifestyle.

Start with a needs assessment

Workers surveyed by Transamerica estimated they would need $350,000 (median) by the time they retire, in order to feel financially secure.

Estimated needs vary by employment status. The following are the average (mean) estimates:

  • Self-employed workers estimate they will need $500,000.
  • Employed workers estimate they will need $400,000.
  • Unemployed workers estimate they will need $100,000.
  • 17% of workers estimate they will need to save $2 million or more.

Despite that, just 3% say they have a plan for their retirement savings, but it’s not written down anywhere. Further, few of these plans take taxes, long-term care needs or total savings and income needs into account.

Currently, only about 35% of those surveyed use a professional financial advisor. 

Top concerns

According to Transamerica’s researchers, the main concerns workers have are:

  • Outliving their investments.
  • Needing long-term care or nursing home care.
  • Reduction in Social Security benefits.
  • Not being able to meet the financial needs of family.
  • Cognitive decline/dementia/Alzheimer’s disease.
  • Lack of access to adequate health care. 

Fully 70% of respondents believe that Social Security benefits will not be there for them when they retire.

How to take charge

  • First, take advantage of as much “free” retirement money as you can. If you can do nothing else, contribute enough to your 401(k) plan to pick up any employer matching contributions.
  • Visit with us to discuss your retirement income needs, planning and other concerns. Studies show that go-it-alone investors underperform the market by substantial margins. 
  • Stay healthy. Healthy people have lower medical expenses, and, of course, are in a better position to stay in the workforce than people with serious health problems.
  • Purchase long-term care insurance and/or disability insurance when you are still healthy.
  • Contribute as much as you can to your workplace retirement plan, and/or your own IRA or Roth IRA. If you are age 50 or over, and you meet the income requirements to contribute, you may be eligible for an additional $1,000 per year in catch-up contributions to an IRA, or another $7,500 annually in catch-up contributions to a 401(k) plan.
  • If you are a business owner, you can start your own SEP IRA or 401(k) plan. You may also be eligible for a small business retirement plan tax credit to get started. Contact us for more information.

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