What do you expect when you retire? Will you be traveling around the world because you saved well before retirement or will you be the one fearing living in poverty? We all want the dream of retiring on a beach somewhere, but, that is not happening to many of our seniors. Roughly, 15% of retirees live in poverty once they retire, not enjoying their golden years. Many Americans fear they will outlive their money and not having any Social Security funds to supplement either!
There are several reasons that retirees are not saving enough.
-Not enough education about the tools available. On average, retirees spend over $100,000 during years of retirement but only have $40,000 in retirement savings. If a retiree wants to continue living the lifestyle they had before retirement, they should save roughly eleven times their final working salary to maintain that lifestyle in retirement.
-Having to support their adult children. Many people find themselves in unforeseen situations and need to return home. This causes obvious strain on many areas, including finances.
-Increased fraud/scams. There has been an increased level of fraud, both in number and sophistication.
-Death of a spouse. The loss of income from the death of a spouse can greatly affect the overall financial health of an individual, as well as leave them susceptible to the fraud mentioned above.
So, seniors need to find financial pros that will educate and help them plan for the future, not just look out for their bottom line. Those seniors that are prepared are those who have a variety of planning tools, not just one 401(k) plan. Another planning tool is to have a Long-Term Care (LTC) plan in place. Healthcare costs continue to rise, and we don’t see that diminishing in the near future. Most seniors will be in denial that they might even have health issues as they get older, but by having a plan in place, it will take a huge burden off family members, especially an elderly spouse. According to the Centers for Disease Control and Prevention (CDC), 8 million Americans are receiving LTC each year. This type of care encompasses the daily living needs, such as dressing, bathing, cooking, daily chores, etc. for individuals. With the average retirement age steadily increasing, it is estimated that the average retirement age for millennials will be 73. People are living longer now, well into their 90’s if not to 100. So, planning for retirement and the needs associated with retirement are more important now than ever!
Old North State Trust, LLC (ONST) periodically produces publications as a service to clients and friends. The information contained in these publications is intended to provide general information about issues related to trust, investment and estate related topics. Readers should be aware that the facts may vary depending upon individual circumstances. The information contained in these publications is intended solely for informational purposes, is proprietary to ONST and is not guaranteed to be accurate, complete or timely.