While it is hard for any pre-retiree to determine an exact answer to that question, it seems some people are just stumped.
A Bankrate survey asked working-age Americans how much they should save to have a comfortable retirement, and the most common answer (61%) was “Don’t know.” The average estimate of the 39% who ventured a guess was $650,000. On average, members of Generation X felt they would need $1 million, while baby boomers and those age 73 and older most frequently said $500,000.
Just 16% of the pre-retirees surveyed said they were deferring 15% or more of their salaries into retirement accounts, which is a common recommendation these days. Twenty-one percent reported saving 5% or less per paycheck. That does not portend good things to come, given that workers older than 50 should have the equivalent of several times their salary saved for retirement.
Yes, retirement planning is an “inexact science,” but that does not mean an individual or couple can simply wing it and hope for the best. Before retirement approaches, a conversation with a retirement planner should happen to help a pre-retiree identify income needs, potential income sources, and threats to savings. That discussion may bring more clarity to a retirement transition.
Yes, Retirement Can Mean an Adjustment for Couples
When spouses or partners retire, free time is suddenly abundant. Spending the whole day together is possible—but for some couples, perhaps less than advisable.
One person’s routine can seem less ambitious or energetic than the other’s, and that may become irritating, even if the difference largely stems from health issues. Sometimes one spouse or partner has little idea of “what’s next,” especially if self-worth is tied closely to professional or career identity.
Retiring spouses need independence as well as togetherness. They need to understand what the other spouse wants to do on a typical day and allow each other freedom (including reasonable financial freedom) to pursue those hobbies and passions, so long as the household finances and retirement savings are not jeopardized.
Some retirement counselors recommend that spouses spend hours of the day apart and meet for lunch or dinner (either in or out, as the budget permits).
On the Bright Side
According to a recent Employee Benefit Research Institute study of retiree savings, almost a third of U.S. retirees had greater amounts of non-housing assets 18 years into retirement than they did when they first retired.
Registered Representative, Securities offered through Cambridge Investment Research, Inc., a Broker/Dealer, Member FINRA/SIPC. Investment Advisor Representative, Lighthouse Financial, LLC., a Registered Investment Advisor. Cambridge and Lighthouse Financial, LLC., are not affiliated.
This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty.
1 – cnbc.com/2018/06/07/americans-dont-know-what-they-need-to-retire-and-could-end-up-broke.html [6/7/18]
2 – marketwatch.com/story/youre-happily-married-will-retirement-ruin-that-2018-06-04 [6/4/18]
3 – nextavenue.org/surprising-truth-people-spend-retirement [6/6/18]