Planning for your retirement is one of the most important things you must take care of in your life. Yet only about 50% of Americans have a retirement plan, according to Investopedia.
Experts in financial planning advice suggest that you will need to replace 80% of your current income by the time you get to retirement. What’s troubling is that many people are not even close to that target. In fact, with a large pool of people depending on social security, which averaged $1,404 (total $16,848 annually) at the start of 2018, it’s clear that retirement planning is woefully inadequate.
The picture gets a bit more worrisome when you take into consideration the reality that no one knows how long the retirement phase of their life will last. These days, on average, people are living much longer. Although the average life expectancy is up near 79, the data shows that more and more people are living and past 85 years old. Indeed, the number of centenarians in the U.S., for example, has almost doubled since the year 2000, according to statistics from the centers for Disease Control and Prevention.
That’s why personal financial planners and other experts in the field are recommending that people try to have at least 20 years’ worth of retirement savings and then some. That means, with the current retirement age being 66, people should have enough saved to get them comfortably to age 86 or longer, if possible.
There are several key issues involved. One is that we may not be able to depend on the continued level of benefits from social security. Another is the fact more than 70% of those who live past the retirement age will need long-term care at some point. That brings the need for assisted living into focus. And with assisted living facilities having a median cost of around $45,000 annually, it appears that benefits provided by the government won’t be sufficient to get the job done.
One of the recommendations to help get people ready for their later years is that they start saving when they are in their 20s. Even if they haven’t started saving towards retirement and they’re into your 30s or even 40s, there is still hope. The important thing is to begin. Sound Asset Management can help you secure your future with its portfolio of personal wealth management solutions and sound financial planning advice.
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