Today, Americans are unprepared to move from their working lives into retirement. Simply stated, Americans simply just don’t save enough. Americans save less than 3% of their wages. It is estimated by financial planners the appropriate level of saving would be 10% of a family’s income. However, with more and more Americans living paycheck to paycheck, a 10% savings threshold falls on deaf ears.
Retirement Needs
As a rule of thumb, a retired individual will require approximately $200,000 in savings for every $1000 of monthly spending anticipated at the time of retirement. This is based on a return of approximately 5% per year. By example, should you have expenses of $3000 a month, for a period of 20 years you would need approximately $600,000 in retirement funds saved.
The average American family has approximately $45,000 in retirement savings. More than half of the American public are concerned they will not have enough money to support themselves for a period of at least 20 years of retirement. The outlook gets even bleaker should you be retired for 30 years instead of 25.
Retirement Ages Changing
Most Americans today plan on working until at least 66 years of age. This is significantly higher than retirement age of 57 which existed in the 1980’s.
Medical Expenses
Baby boomers need to be concerned Medicare benefits will be cut back during their period of retirement. This will cause an additional squeeze on retirement assets. It is estimated Medicare benefits will have to be cut back so the program does not run out of money.
About The Author
Elliot S. Schlissel, Esq. is an elder care lawyer. He represents men and women concerning issues involving estate planning, drafting of wills and trusts and Medicaid planning. He can be reached for a consultation at 1-800-344-6431, 516-561-6645 or 718-350-2802.
