Seven Steps To A Successful Retirement

Seven Steps To A Successful Retirement

The Transamerica Center for Retirement Studies conducted a survey that highlights how American workers are largely unprepared for retirement. The survey concluded that relatively few American workers have a backup plan in the event they are forced into early retirement. The survey found American workers estimated their median retirement savings needs at $600,000. In comparison, less than one-third (30 percent) currently have $100,000 or more saved in all household retirement accounts. To help American workers get started in developing a strategy to reach their retirement goals and dreams, the Transamerica Center listed the following seven tactics:

1. Get the conversation going with friends and family: Just 9 percent of workers frequently discuss saving, investing and planning for retirement with family and friends.

2. Formulate a plan and write it down: Only 10 percent of workers have written out their retirement strategy.

3. Get educated: The majority of workers (71 percent) say they do not know as much as they should about retirement investing.

4. Consider retirement benefits as part of your total compensation: Fifty-three percent of workers would select a job offer with a higher than expected salary but poor retirement benefits over one with excellent retirement benefits and minimum salary requirements.

5. If your employer offers a plan, participate. And if your employer doesn’t offer you a plan, ask for one. Just 71 percent of workers report being offered an employee-funded plan at work, while 92 percent say a plan is an important benefit. However, almost one-quarter of workers (22 percent) who are offered a plan at work do not participate.

6. Take advantage of the Saver’s Credit. Make catch-up contributions: Just 25 percent of workers are aware of the Saver’s Credit. Just over half of workers (56 percent) are aware that people age 50 and older may be allowed to make catch-up contributions to their retirement plan.

7. Have a backup plan in the event you become unable to work before your planned retirement: Only 19 percent of workers currently have a backup plan.

If you or someone you know is concerned about saving for retirement, or needs to build a backup plan in case retirement comes earlier than expected, call a financial planner today for a consultation or review.

FINANCIAL FACTS

Older And Older – By the year 2050, 20 percent of American citizens will be at least age 65. In 1950, only 8 percent of American citizens were at least age 65 (source: Congressional Budget Office, BTN Research). 

Not Thirty Years In Length – In the 1930s, the average length of a home mortgage taken out by an American homebuyer was only five to 10 years (source: Penn Institute of Urban Research, BTN Research).      

At Time Of Death – Federal estate tax law allows a 2013 decedent to pass onto his or her heirs $5.25 million estate tax-free. Under the “American Taxpayer Relief Act” signed by President Obama on Jan. 2, 2013, the amount that can be passed estate-tax free onto the heirs of a decedent in 2014 and beyond will be increased according to the rate of inflation. The federal estate tax exemption was $1 million in 2003 (source: Treasury Department, BTN Research).