Is America In A Retirement Savings Crisis?

It’s the perfect storm: social security has one foot out the door
and pension funds are all but dead. Regardless of what happens in
Washington, how do you know you won’t become the victim of
crumbling social security and a nonexistent retirement plan? 

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Can I Depend On Social Security?  All of us know social
security is in trouble.

We also know that no one in Congress wants to do anything about
it. They don’t want to be the person who took away everyone’s
social security payments. Who really wants to do that? 


But, if we continue on as we are now, social security funds will
be depleted by 2034. 


If we get to that point, it’s likely everyone will see at
least a 25% cut in benefits across the board. We
probably won't go that long without something changing, but
so far, we have no idea what that will look like. 


To add to the problem, pensions, which were once a staple of
retirement plans, have been nearly, if not completely dead, since
the 1980s. 
Why Don't I Have A Pension?

If you, like most normal people, aren’t familiar with the history
of pensions, here’s a quick synopsis. In the past, most
American workers who had jobs with benefits had a pension
plan. Pension plans were great because it was guaranteed
income when you entered retirement that didn’t require you to
invest your own money or really risk anything at all. You just
had to stay at your job. Sounds great, right? 
But in the 70’s there was a shift from pension plans to 401ks,
as they were much cheaper for companies. In the long term, the
pension plans weren’t sustainable, so Employers began to push for
their employees to invest money in a 401k retirement plan. 

The problem for the worker was they had to go from knowing they
had income available to putting their own money away. They had to
actively save and invest wisely. With a pension, it didn’t matter
if you saved or invested, you would always have that money
available. 


Since the shift to 401ks, less people are equipped for
retirement. 


We have an entire generation of people ready to retire who have
saved exclusively with 401ks. With social security’s decline on
top of that, your retirement could be in jeopardy. 
Show Me The Money!

There are two articles I recently read about the the problems
those nearing retirement are facing now. 


The first one was from the Wall Street Journal, and it
was a debate between two experts about whether there is and or is
not currently a retirement savings crisis in our
country. It’s an informative read that will help you see
both sides of the argument. 


The second was **from The Atlantic and painted a picture of what
life without retirement savings may look like for you.**It’s
bleak, but the message is important. You’ll want to make sure you
read this one! 


If you don’t have time to read those now, here’s some the key
statistics from both articles: 


Social security will be depleted by 2034.

Poverty fell for populations 18 to 65 but rose for those over
65, meaning the only group whose poverty level has risen is those
in or near retirement. 

2/3rds of Americans don’t contribute anything to a 401k or
other retirement plan. 

For those 55 to 64, the median savings in their 401k is only
$15,000. 



**The data shows that there are a growing number of people who
will NOT be able to retire comfortably, if at all. **
I Don’t Think I Can Retire. What Do I Do? 

It’s my job to make sure you’re prepared and able to achieve your
dreams for the future. I want you, your parents and your children
to be in a healthy place financially with a plan to retire. 
So many people come into my office every day and are convinced
they’re never going to be able to retire. **However, there are very
few situations that we’re not able to salvage together. **

Out of the hundreds of people I’ve helped in my career, there are
only two cases I can think of that were truly hopeless. 


The first was an older couple well into retirement. The husband
was the only one who worked and he handled all the financials for
their family. He had a large chunk of money given to a 10 year
payout. He bought into the program thinking by the end of the 10
years, they’d have another way to make money or would have enough
saved up to continue living the way they wanted. 


Unfortunately, they were less than 3 years away from the end of
the payout, but they had no money saved and the husband was no
longer able to work due to his health. **They had absolutely no
money available for them and they had no options to get out of
their situation. **


The second couple was a bit younger with a large amount of money.
They lived comfortably, had multiple timeshares and properties,
but weren’t generating enough income to pay for everything. 


After looking at their financials, I saw that they could have
enough money to live on after retirement but only if they made
great changes to their lifestyle, including selling their extra
properties. It was obvious that if they didn’t make those
changes, they would be out of money in a few years. 


They broke down crying in my office and decided they weren’t
willing to make the changes they needed. So I, unfortunately,
wasn’t able to help them. 
Okay, Now I’m Really Scared  I’m not trying to scare you.
I’m trying to prepare you. 

These are the absolute worst case scenarios. **The vast majority
of people can make the changes necessary to ensure they’re
prepared for retirement regardless of their current
situation. **


If you’ve never made a retirement plan, you need to as soon as
possible. You want to make sure it is flexible that you’re
confident will be able to provide you the financial security that
you need. If you don’t know how to how to make your plan, come by
my office for a free consultation. We’ll look over every aspect
of your financial world, create an income plan and make sure
you’ll be able to retire with confidence.


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