The big disconnect: Retirement expectations vs. retirement realitiesSubmitted by Financial Planning Solutions, LLC on August 9th, 2018
When we start the financial planning process with a new client, we have no idea whether they will be ready for retirement when it comes.
I’ve had countless prospective clients ask me, “You must have some idea if I have enough or not?” Unfortunately, I do not. The reason is that people have different expectations about and goals for their retirement: Some have grand plans for retirement but have not taken enough steps; others just have not thought it through or figured out what they will need.
A recent study by Aegon on retirement readiness showed that most people have not considered some of the major trends that will affect their retirement. At the top of the list was reductions in government retirement benefits but second was increased life expectancy. Imagine what it would mean if you lived 20 years longer than you expected? Where is all that money going to come from if you are spending with an expectation that you’ll only live until age 75?
Further concerning is that most people plan to retire at age 65. But the stunning “…reality is that 39% of retirees globally retired sooner than planned.” And, about one-third of those stopped working early because of poor health. Another 26 percent stopped working due to unemployment or job loss.
To just keep working is not a good strategy.
Many people will find that they are unable to continue working even though that is their current plan.
What is the lesson here? You should plan to save and invest for retirement with the assumption that you may have to retire sooner than you expect. Working until you’re 70 or until you can’t anymore may be less possible than you think and, in the end, out of your control.
Questions about your retirement? Give us a call; we’re here to help.
Source: The Aegon Retirement Readiness Survey, 2018 as published by Bloomberg: https://www.bloomberg.com/amp/news/articles/2018-05-29/the-world-isn-t-p...
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