3/5/2013 1:45 AM ET|
Confronting your retirement worries
Providing for your golden years isn't as simple as it used to be. While you may be right to fret, don't let that paralyze you.
When it comes to retirement problems, easy answers are in short supply. As a result, many Americans are concerned about whether they'll be able to retire comfortably.
But if you're willing to accept that painless solutions can't fix them all, there is still hope for easing your retirement worries. Here are some of today's most common retirement anxieties, along with approaches to solving them.
Worry No. 1: Outliving your money
Only in retirement planning is a long life considered a risk. When it comes to the difficulty of making your money last, the task gets more complicated the longer you live.
According to the U.S. Census Bureau, since 1950, the average life span of Americans has increased by 14.8%. Over that same period, savings rates have declined by 40.8%. That math just doesn't add up to sound retirement savings.
There are three possible solutions to this:
- Plan on retiring later. This is can be a powerful solution, because it gives you a chance to both grow your savings over a longer period and shorten the number of retirement years you have to fund. It is not a foolproof solution, though, because declining health or economic factors may prevent you from working as long as you would like.
- Start saving earlier. For older workers, this ship has already sailed, but younger workers should keep in mind that the sooner they start saving, the more they can tip the balance between saving years and retirement years in their favor.
- Save more. It takes sacrifice to increase your savings rate, but it's better to sacrifice voluntarily now than to have sacrifices forced on you in retirement.
Worry No. 2: Not being ready when retirement comes
Between delays in building retirement saving and economic setbacks, many middle-aged workers find themselves fast approaching retirement with nowhere near as much money accumulated as they need. If you don't have many years until you reach retirement age, raising your savings rate or improving investment returns is only going to make an incremental difference. The two main solutions you should focus on are:
- Plan on retiring later. See the above discussion for the pros and cons of this approach.
- Lower your spending target. This will mean a lower standard of living in retirement, but it's better to spread a little belt-tightening over your entire retirement than to suddenly face an extreme hardship when you run out of money.
Worry No. 3: Disappointing investment returns
The stock market has produced lackluster results for more than a decade. Most savings account interest rates are near zero, and bond yields aren't much better. Here are three ways to fight back:
- Shop for higher savings account rates. MoneyRates.com has consistently found that the best interest rates on savings accounts are four or five times the average rate.
- Take full advantage of tax-deferred retirement programs. In particular, make the most of employer-sponsored plans with a company match, because these provide an instant return on your investment.
- Save more. It's sad to say, but the financial markets are not going to do the heavy lifting when it comes to retirement saving today. You have to do it yourself.
While worrying can be useful for raising your awareness of a problem, it can also create a feeling of hopelessness that prevents action. By focusing on the solutions to your retirement worries -- rather than the worries themselves -- you may find what it takes to conquer them both.
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It pisses me off that people like Richard Barrington write these articles like all the people retired or nearing retirement are stupid.
Most people know these things already whether they have prepared or not.
Geez Retire later or save earlier. What an idiotic statement. I don't think anyone over 50 could have figured that out.
Damn, I am getting tired of all this useless advice. How about someone coming up with something that will really help?
Saving for retirement isn't as simple as it use to be?
According to my parents and my grandparents, it was never simple.
Where in the world is this Barrington's head?
He obviously has no clue, is talking to the wealthy minority, or is a shill for the federal reserve.
Our indebtedness has grown constantly. There is a reason for that. Our monetary system currently operates by creating and monetizing debt. Think about it. M1 money has to have an origin. Money does not have reproductive capabilities, it has to be created. In letters sent to the treasury, asking how money is created? The reply received from Russell Munk, (Asst. general counsel, U.S. Treasury was:
"The actual creation of money, always involves the extension of credit from private commercial banks."
The next question asked was: If all money is created as a loan, where does the money needed to pay the interest on all borrowed money come from?
In answering this, Russell Munk said; " The money to pay the interest on borrowed money, comes from the same source as all other money". In other words, the money needed to pay the interest on one person's loan, comes from the debt principal of another's loan that has been spent into circulation and captured through commerce. This means that we must continually borrow, or the system begins an immediate collapse. All money is debt, and without borrowing, we are without a medium of exchange.
Think about it. When businesses borrow, we pay for that borrowing and interest in a higher cost of living. When government borrows, we pay for that borrowing and interest in higher taxes. The debt never stops growing. Interest is the only thing I can think of that saps our productivity every minute of every day, 365 a year. It eventually has to collapse. Congress has misled the public for decades, protecting the bankers and their ponzi scheme. Just think about how the cost of living keeps growing, along with the national debt that never gets paid down, but continues to grow. Your share of the national debt is approximately $50,000 for every man, woman and child, and it grows every day.
This debt system works for the wealthy minority, but not the struggling majority. They are kept in financial slavery. Don't count on your retirement being there as an absolute. It could very well be swallowed up by our debt monetary system.
The fact is very simple when it comes to retirement "YOU ARE ON YOUR OWN". The government has no real plan to save SS. Both Democrats and Republicans keep giving us lip service on the issue. They will not do anything real until forced to do so. Then one day the retire people here in the US will wake up to the news of major benefit cuts for all. Just like in Romania in 2008, they did a 20% cut in benefits followed by a 25% cut six months later. No warning, they just informed everyone that their next check would be less.
I retired this year and as someone stated the "cost of living under this government has increased" and I have to agree but I still decided to go ahead and retire. For the last year I was earning what I did back in 2007 but yet my cost of living increased. I have had to adjust my living expenses to the point where I am down to the bare minimum; I have nothing else to cut except my utilities. This would be true even if I had kept working so I figure why not retire and start receiving my pension and get rid of the stress. If what I read about the President wanting to cut social security and medicare benefits is true then it will hurt millions of people. I guess the government wants to keep what we paid into social security for their use as they see fit. And to think that social security was established as a retirement program.
What else is the government going to take away from us... our freedom?
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