Retirement In Sight: Rethinking Retirement

Some of the “conventional financial wisdom” circulating about retirement may need a second look because those assumptions may not prove true for everyone. Or, to put it another way, sometimes people think about retirement conveniently rather than realistically. Many people assume they will retire as they choose, purely on their terms. Is that how it usually happens? The Employee Benefit Research Institute’s 2021 Retirement Confidence Survey indicates otherwise. The average retirement age is 62, yet most workers expect to retire at 65. While 59% of workers believe they can ease into retirement via part-time work, just 19% of current retirees have. As for working in retirement, 72% of pre-retirees expect to do so, yet just 30% of retired survey respondents said they earned income from employment or freelancing. You still hear about the “4% rule” for retirement income withdrawals, withdrawing 4% a year off your retirement assets. But one size rarely fits all. One of the most complicated and essential calculations is figuring out how much money you can withdraw from your retirement account.  Finally, you sometimes read articles that tell you to save at least $1 million before you retire. It’s important to remember that anything you have saved in your retirement account is better than nothing, but the more you can put away now, the more you may have later on. [1] 

How Much Do You Know About Eldercare? 

Eldercare takes different forms: nursing home care, assisted living, adult daycare, and even some forms of healthcare administered at home. According to Genworth’s most recent study of U.S. eldercare costs, a private room in a nursing home now costs an average of nearly $9,000 a month. A one-bedroom assisted living unit, on average, demands about $4,500 a month. Even home health aides cost about $25 per hour. Medicare will not pay for long-term custodial health expenses, so some households look into insurance solutions. In 2021, according to the American Association for Long-Term Care Insurance, the average annual premium for an extended care policy issued to a 55-year-old couple was $5,025. This may seem costly, but ongoing nursing home care is much more expensive. May you want to consider checking into payment choices now with your future in mind? Years from now, you and your loved ones may be glad that you did. [2]

On the Bright Side

Overall, large pension plans appear to have more substantial financial positions. A Willis Towers Watson white paper published earlier this spring studying 361 Fortune 1000 firms estimates their aggregate pension funded status at the end of 2021 at 96%, a 5% increase from 2020. That represents the most robust funding status for large defined benefit plans since 2007. [3]


1 –, January 2021

2 – Investopedia, January 28, 2022

3 – Wealth Management, March 22, 2022

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