Updated on Dec 14 2018
The 2018 Planning and Progress Study recently revealed new insight into America’s retirement planning — and the numbers are staggering. Learn more about the study, why so many seniors are not prepared for retirement, and what you can do to start preparing for your financial future.
The Majority of Americans Feel Financially Unprepared for Retirement
Many Americans have very little saved for the retirement. The 2018 Planning & Progress Study gathered data in an online survey from over 2000 Americans over the age of 18. In that survey, 78 percent of respondents said they were “extremely” or “somewhat” concerned about affording a comfortable retirement and nearly 66 percent said there was some likelihood of outliving retirement savings.
Additionally, the report found that, * 21 percent of Americans have no retirement savings at all, * 33 percent of baby boomers have between $0 and $25,000 of retirement savings, * 75 percent of Americans reported a lack of confidence in receiving Social Security benefits, and * 46 percent admitted to taking no steps to prepare for the likelihood they could outlive their retirement.
The Importance of Retirement Planning
There are a number of reasons that Americans are not prioritizing retirement planning. From not having finances organized to daily budgetary constraints, there is always a reason to put off retirement planning. A recent phenomenon known as “The Sandwich Generation”, where adults age 40 through 50 are caring for children and aging parents, has caused an immense financial strain. In fact, 15 percent of people between the ages of 40 and 50 are financially supporting aging parents and their children, making retirement planning extremely difficult.
However, retirement planning is essential for a financially secure future and not being financially prepared can have dire consequences. Aside from being living comfortably in retirement, not planning for retirement puts a strain on government resources.
According to a survey from Gallup, 43 percent of adults between the ages of 50 and 64 expect to rely on Social Security during retirement. This number has been steadily increasing since 2001. However, only 24 percent of respondents in the 2018 Planning & Progress Survey believe it’s extremely likely that Social Security will even be available when they plan to retire and many experts believe that without government action, Social Security will run out by 2034.
Additionally, life is full of unknowns. We never know when layoffs will come, when jobs will be scarce, when we will get sick and be unable to work, or when a loved one will need us as a caregiver. Financial planning is a necessity for those moments when the unexpected arrives.
Planning for Retirement Now
Over half the survey respondents acknowledged they would most likely work past the typical retirement age out of necessity. And, while delaying retirement can be a wise financial decision, it should not be an all-encompassing retirement plan.
Rebekah Barsch, vice president of planning for Northwestern Mutual notes, “Continuing to work later in life should be a personal choice, not a mandatory requirement for survival. Proactive retirement planning can be the difference between a desired and a default retirement lifestyle.”
Being proactive with your retirement now can save headache and heartache in the future. Avoiding common financial mistakes today can save you a lot of money in retirement, as can contacting a fiduciary financial advisor.
If you’re one of the 78 percent of people not prepared for retirement, make a plan today. Start by contacting a qualified financial advisor who is committed to putting your needs and interests first. It’s not too late to rewrite your future.
Originally published at www.seniorfinanceadvisor.com.