Are You Saving Enough For Retirement?

The thought of saving enough for retirement is usually not at the forefront of most people’s minds. According to studies, many Americans are unprepared for the end of their working days. Nearly half of Americans nearing retirement age do not have enough in their retirement savings plans to pay for basic expenditures 10 or 20 years into retirement.

The roots of retirement

The modern concept of retirement has only been around about 60 years. Before that time, people worked until they were physically unable to do so anymore, and then, if they were lucky, they went to live with children or other relatives. If they weren’t so lucky, they might have gone into an institution or poorhouse, or just gone home and died. Retirement wasn’t something people really wanted, even in the best of circumstances.
Today, of course, many people over 40 dream about retirement. A lot of those dreams revolve around moving to a sunny state and playing golf into their golden years. The reality is, fewer and fewer people will realize this dream, because the money will not be there for them.

Modern medicine leads to increased lifespans

One of the problems associated with retirement is the average person’s lifespan. When Social Security was started in 1935, the average lifespan for females was 65, (59 for males), which is how the standard retirement age was decided upon. Many people died of diseases associated with old age, such as heart disease or cancer, before ever collecting their retirement. Today, with modern medical advances, many of those same diseases can be treated and people can live many more years than they would have in the past. Good news for the elderly, but not so good for their retirement accounts, which now must stretch 25 or 30 years or longer.

Social Security in danger?

Yet another issue is the question of Social Security. There have been many projections about the insolvency of the Social Security fund, and Congress has done little so far to address the issue. Whether Social Security will be around for many retirees remains to be seen. However, many people believe that they will have to rely solely on their Social Security checks for retirement income.

Answers to the retirement question

So, what are the answers? Some, like fixing Social Security, are out of the average person’s hands. Another answer is to keep working after age 62 or 65, but that is not always feasible; you may become ill, or your job may be eliminated and finding another job may be difficult. What you can do now, however, is start planning.

If your employer offers a retirement savings plan, get on board and have your payments automatically deducted from your paycheck.
Start a traditional or Roth IRA for more savings.
With real estate prices and interest rates at a record low, now may be the time to buy a house for an investment, either to live in yourself or as a rental property. A foreclosure house may be the way to go.

Even if you are nearing retirement age, it’s never too late to start saving and planning.