Are you planning to retire sometime within the next decade? Many of us have been planning for this moment for many years, and now we’re in the home stretch of our careers. We hope you’re feeling confident about your plans, but it’s always a good idea to keep an eye on everything from the economy to the details of your personal life. Many different factors can change in the years leading up to retirement, and your plans can also change.
In particular, the statistics on retirement tend to shift over time. Some of this data might surprise you, and prompt you to think twice about your plans (and perhaps make a few adjustments).
Right now, the average retirement age is 66. Because the average life span is 78.7 years, that means the average length of a retirement will be about 12 years. But of course, not everyone fits into the average. Many of us will enjoy far longer retirements than 12 years. Will your retirement plan hold up for two decades or longer?
Luckily, 81 percent of workers are preparing for that exact scenario. They’re examining their cost of living, in hopes of helping retirement savings to last longer. And before retirement, they’re maxing out retirement contributions and considering options like guaranteed income sources.
On the other hand, some of us are making mistakes that can be costly. Of Americans in their forties, 46 percent say that they’ve already made an early withdrawal from a retirement plan. Since early withdrawals can trigger penalties and cost you a significant amount of compounding interest over the years, it is always best to find some other way to fund emergencies.
And yes, emergencies can happen to anyone. Fifty percent of current retirees say that they were forced to retire earlier than they had originally planned, due to layoff, illness, or other unexpected situations. If you must retire early, what adjustments can you make to ensure that your retirement income lasts as long as it needs to?
And as you might have expected, 33 percent of working Americans don’t have a retirement plan at all. Since we can’t count on Social Security to fund all of our needs in retirement, it’s important to establish some other form of retirement income.
Even among those who are saving, those savings might not be adequate. The median worth of a retirement account is about $107,000, which sounds like a lot of money, but results in about $310 monthly when invested into an inflation-protected annuity.
Some of this information might feel reassuring, while other statistics point to a need for greater awareness and planning around retirement. How are you feeling about your plans? Give us a call, and we can help you analyze your current situation and make any necessary adjustments to your plans.