The 77 million members of the baby boomer generation, once tenaciously clinging to their youth, are now beginning to face retirement. A new Associated Press-LifeGoesStrong.com poll reveals many of the boomers born between 1945 and 1964 are worried about building their nest eggs and believe they will need to work longer than planned, or may never be able to retire.
Traditionally your retirement nest egg was viewed as sitting on a three-legged stool, fairly well balanced by the three supporting legs – the pension plan benefits provided by your employer, your personal savings and investments and Social Security benefits. However responsibility for retirement funding has largely shifted from employers to employees over the past 30 years with the emergence and expansion of 401(k) plans. Individuals have often struggled to grow and manage their own retirement plans as well as personal assets during these challenging economic times. Now politicians in both parties have hinted they are willing to scale back Social Security benefits. The traditional three-legged stool has become perilously wobbly for many.
As you look ahead, it is critical to save, invest and grow assets to assure adequate income for fulfilling, longer lives, while anticipating the added burden of escalating health care and long term care costs. More pre-retirees are right-sizing early, paying off debts and spending less to build up financial assets for retirement. Many are preparing for possibly working more years, but maybe fewer hours and in more rewarding jobs.
However, recent surveys point out that a majority of individuals are misjudging the number of years they will live in retirement and just how big that nest egg will have to be to meet their needs. For a couple retiring at age 65, it is likely at least one of them will live into their 90's. The U.S. Census reports there are 84,000 centenarians, a number projected to grow to 580,000 by 2040. Many retirees will have parents who could need income assistance for their unexpected longevity.
Each account being invested for retirement must be viewed in context of the overall assets owned in your burgeoning nest egg to assure an appropriate balance. Your assets should be properly allocated and invested only after a thorough review of your personal goals and needs, not only for early retirement years, but way into the future.
Over recent volatile times, we have learned the importance of overseeing these accounts after making the initial investment allocations. It is prudent to monitor the periodic reports that track investment performance, examining returns over short and long periods of time. However, when reviewing your year-to-year figures, recognize that both your contributions and investment returns build your balances and calculate your performance accordingly. Then compare those results to peer investments with similar objectives and comparable market indices. But, keep in mind that a market index isn't subject to operating expenses.
Professional financial life planning and investment management should be considered in this increasingly complex environment to assure your planning is on course for a successful retirement. Prudent planning will give you peace of mind when it is time to crack open that nest egg.
Traditionally your retirement nest egg was viewed as sitting on a three-legged stool, fairly well balanced by the three supporting legs – the pension plan benefits provided by your employer, your personal savings and investments and Social Security benefits. However responsibility for retirement funding has largely shifted from employers to employees over the past 30 years with the emergence and expansion of 401(k) plans. Individuals have often struggled to grow and manage their own retirement plans as well as personal assets during these challenging economic times. Now politicians in both parties have hinted they are willing to scale back Social Security benefits. The traditional three-legged stool has become perilously wobbly for many.
As you look ahead, it is critical to save, invest and grow assets to assure adequate income for fulfilling, longer lives, while anticipating the added burden of escalating health care and long term care costs. More pre-retirees are right-sizing early, paying off debts and spending less to build up financial assets for retirement. Many are preparing for possibly working more years, but maybe fewer hours and in more rewarding jobs.
However, recent surveys point out that a majority of individuals are misjudging the number of years they will live in retirement and just how big that nest egg will have to be to meet their needs. For a couple retiring at age 65, it is likely at least one of them will live into their 90's. The U.S. Census reports there are 84,000 centenarians, a number projected to grow to 580,000 by 2040. Many retirees will have parents who could need income assistance for their unexpected longevity.
Each account being invested for retirement must be viewed in context of the overall assets owned in your burgeoning nest egg to assure an appropriate balance. Your assets should be properly allocated and invested only after a thorough review of your personal goals and needs, not only for early retirement years, but way into the future.
Over recent volatile times, we have learned the importance of overseeing these accounts after making the initial investment allocations. It is prudent to monitor the periodic reports that track investment performance, examining returns over short and long periods of time. However, when reviewing your year-to-year figures, recognize that both your contributions and investment returns build your balances and calculate your performance accordingly. Then compare those results to peer investments with similar objectives and comparable market indices. But, keep in mind that a market index isn't subject to operating expenses.
Professional financial life planning and investment management should be considered in this increasingly complex environment to assure your planning is on course for a successful retirement. Prudent planning will give you peace of mind when it is time to crack open that nest egg.