According to a recent study by Teresa Ghilarducci, a professor of economics at the New School for Social Research, 75% of Americans nearing retirement in 2010 had less than $30,000 in their retirement account. Also, as corporate pensions have all but disappeared, retirees and future retirees are quickly realizing that “retirement” as they know it (or at least as they have read about it) is no longer an option. Due to this lack of planning and saving, the future for the elderly may consist of delayed retirement, no retirement at all, and going back to work after retirement for many. Employers will be faced with an aging workforce and the tough decision of what to do with employees who will not and cannot retire for financial reasons. Demotions, pay cuts and part time status may become the norm…and that is if you are lucky enough to keep your job.
Key Planning Strategies
Despite this potential doom and gloom scenario, you can still take the steps necessary to build and ensure a secure retirement. Some steps to consider are:
- Review your current cash flow to see what can be cut and used to increase your retirement savings.
- Utilize online tools to calculate future cash flow projections to estimate what you will have at your desired retirement age and see how small increases in savings percentages can add up over time.
- Evaluate your investment options and their respective fees, risks, past performance and potential to meet your future expectations.
- Utilize a diversified asset allocation strategy you are comfortable with and reassess your risk tolerance over time.
- Lastly, do not try and time the market.
While retirement is quickly becoming a national crisis, you can still be one of the few who successfully achieves their goals of financial independence and security. Act now and take the steps necessary to make this happen for you and your loved ones!
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