Q. My husband, Glenn, and I are in our 50’s and deciding when to retire. We’re finding decisions about retirement (when to retire, where to retire, how much to save, etc.) to be some of the biggest decisions we have had to make. We were told that the best time to start planning is at least 10 years before our desired retirement date, but we don’t even know if 10 years from now will be doable. I’m hoping the pandemic won’t delay things for us, as our finances were impacted by my husband losing his job. Can you offer some insight into retirement planning and risks faced by us and the younger generations as well (we have a daughter and son who are both in their 20’s.)? Thanks for your help!
A. According to the U.S. Census Bureau, 63 is the average retirement age in the United States right now. This makes sense as 62 is the earliest age you can be collecting your own Social Security retirement benefits (although it is better to wait to collect Social Security, if you can). Some retire earlier and others retire later, depending on their circumstances. Either way, it’s good you are starting to think about it and plan now.
Survey Explores Retirement Outlook for Different Age Groups
The recently released Transamerica Center for Retirement Studies’ (TCRS) 20th Annual Retirement Survey of Workers examines the retirement outlook for Millennials, Generation X, and Baby Boomers. It is based on a survey conducted late last year and offers comparisons with a supplemental survey conducted in April 2020, amid coronavirus stay-at-home orders and large segments of the U.S. economy having been temporarily closed due to the pandemic.
The survey was conducted online within the U.S. from November 6 to December 27, 2019 among a sample of 5,277 people who are still working, including 2,418 Millennials (born 1979-2000), 1,424 Generation X (born 1965-1978), 1,287 Baby Boomers (born 1946-1964), 64 Generation Z workers (born 2001 or later), and 84 mature workers who were born prior to 1946. The April 2020 Supplemental Survey was conducted online within the U.S. from April 16 to 20, 2020, among a sample of 2,030 adults, divided into the same age groups described above.
Survey Findings Show Financial Vulnerabilities Across All Generations
The results of the study show that the long-term implications of the coronavirus pandemic and recession on retirement security have yet to be fully realized. Some believe the financial implications of the pandemic will delay retirement for many who were affected by it financially (due to loss of income, dipping into savings, withdrawals from retirement accounts etc.) The financial vulnerabilities among workers across all generations are becoming clear, as can be seen from the survey findings:
• Working past retirement: 52% of workers expect to work past age 65 or do not plan to retire, an expectation that increases with age. 63% of Baby Boomers either expect to or are already
According to the Transamerica 2020 retirement survey described above, the median amount workers estimate they’ll need to have saved for retirement is $500,000. And while that may seem like a big number, it likely won’t be enough for many people once you take into account a few key factors, including the cost of health care, long-term care, taxes, inflation, travel, housing, and more.
When you set an ambitious goal for retirement savings, it can sometimes feel insurmountable. But by planning in advance, sacrificing a little bit now and investing enough for your future, you can build a nest egg that will see you through your senior years. When you can enjoy life as a retiree without financial struggle, you’ll be very glad you made the effort.
Opportunities That Can Help Improve Retirement Prospects
Although the research from the survey paints a sobering picture, it also explores some opportunities that can help improve retirement prospects. Some specific, actionable examples include:
Besides being a Certified Elder Law Attorney, I am also an experienced retirement planning advisor and long-term care financial advisor through my financial services company, Lifecare Financial Services, LLC, which has been in business since 2006.
Retirement planners, such as myself, generally work with people ages 55 and older, who are within 10-15 years or so of their desired retirement age. Learn more about our retirement planning services here.
Plan Carefully for Retirement
When your planned retirement date is a decade away it can seem like a distant event, and setbacks from the pandemic may make planning more daunting than ever. But it’s important to plan carefully and set realistic goals so that time is on your side and can help you have the means to enjoy the sort of retirement you hope to have.
Even if you started saving and investing for retirement late, or have yet to begin, it’s important to know that you are not alone, and there are steps you can take to increase your retirement savings.
We here at the Farr Law Firm have strategies in place to help all types of people at all ages to plan for retirement, incapacity, and long-term care. By planning in advance, each person can retain the assets it has taken a lifetime to accumulate and the peace of mind that their family’s needs will be adequately and properly addressed. Please contact us to make an appointment for an initial consultation:
Retirement Planning Fairfax: 703-691-1888
Retirement Planning Fredericksburg: 540-479-1435
Retirement Planning Rockville: 301-519-8041
Retirement Planning DC: 202-587-2797