Will I have enough money to live on after I retire?
If you’re a Baby Boomer facing retirement and aren’t sure if you’ll have enough money to support yourself for the rest of your life once you stop working, you aren’t alone. In fact, even if you think you’ve planned well for retirement, you may have underestimated. No one likes to think about getting older, becoming disabled, or dying, but it’s imperative to have your financial and legal affairs in order before retiring.
Financial experts suggest that retirees will need to replace 70% of their pre-retirement income to live during their retirement. Retirement income sources may include savings, investments, 401(k)s, IRAs, social security benefits, pensions, etc.
Yet, an eye-opening study reports that in all but one of the continental United States, retirees over 65 do not meet that 70% threshold, and instead have an average median income of only 60% of what pre-retirees between 45-64 are earning. The northernmost states’ seniors are generally worse off than those in the south, with Massachusetts having the largest income deficiency.
What can be done to close this gap?
Fortunately, even if you aren’t very young, there are still strategies you may employ to bolster insufficient retirement savings:
- Save more money. Maximize retirement funds like 401(k) and IRA accounts. Reduce or consolidate consumer debt and mortgage loans. Cut back on indulgences like trendy coffee bars because sacrificing a bit now will allow you to splurge more later.
- Work longer before retiring. This allows your assets time to grow interest and your debts time to be paid off or reduced. Each year you delay taking Social Security Income (SSI) allows the monthly amount you receive to get larger—with up to a 76% higher monthly check for who wait to take SSI at age 70 instead of 62. Plus, each year you work is one less year you need to be supported by your retirement savings.
Many baby boomers are members of the “sandwich generation” — people who are simultaneously caretakers of their elderly parents and their own young or adult children. This draining situation, coupled with the economic setbacks of the long recession and, for some, the burden of their children’s college tuition and loans, may have derailed even the best laid retirement savings plans. The important thing is not to panic about your situation, but to take action to improve it.
Are you worried about who will care for your parents, your children, or your spouse if you died or became disabled?
Financial planning and estate planning are related. The attorneys at Monk Law Firm, PLLC are experts in Estate Planning, Elder Law, and Medicaid planning. With offices in North Carolina and South Carolina, Monk Law Firm, PPLC services clients throughout Charlotte, Rock Hill, Fort Mill and the surrounding areas. Get peace of mind. Call 704-369-9977 (Charlotte, NC) or 803-594-4453 (Fort Mill, SC) today for a consultation, or contact the firm online here.
Source: https://www.mainstreet.com/article/why-baby-boomers-need-to-boost-retirement-income