Ideally, retirement is a point in one’s life to enjoy some well-deserved free time. Many of us have dreams of traveling, spending time with loved ones, completing unfinished projects, or possibly even starting new projects. Unfortunately, more Americans are finding themselves having to push back their retirement. Many things can cause this, and the average retirement age varies by state. In any case, there are ways to combat some of the scariest issues facing retirement goals.
1. Social Security Is Not A Reliable Safety Net
According to the Social Security Administration, just $4 out of every $10 of the average American worker’s pre-retirement salary will be replaced by Social Security retirement benefits. Experts generally suggest that it takes about 80% of your pre-retirement income to sustain your lifestyle. Having a financial advisor can assist in finding alternate options by defining a savings plan, an alternative source of income, and designing a long-term financial strategy.
2. Retirement Isn’t Always Planned For
We all have an ideal age of when we would like to retire. Life, however, has a way of surprising us, as 55% of Americans find themselves having to retire early. The number one cause, health reasons, whether personally or caring for a loved one. A financial advisor can layout hundreds of scenarios with numerous variables to help you potentially plan and understand how unexpected life events might affect your future.
An excellent place to start is by understanding your financial risk level. Find out how your perceived risk could affect your financial plans in our blog, Your Time, Your Money: Understand Your Financial Risk Level.
3. Social Security Is Drying Up
According to the most recent Social Security trustees’ report, unless taxes are increased or benefits reduced, Social Security will be depleted by 2034. Even if this doesn’t happen, with the baby boomers generation reaching retirement age in 2035, there will be a decrease in the ratio of current workers paying Social Security tax for every person collecting benefits.
4. Medical Expenses Can Add Up
Fidelity Investments’ recently-released estimate finds that a couple who retires at age 65 in 2019 can expect to pay $280,000 in healthcare costs throughout retirement. This number can rise if long-term care becomes necessary. Having a plan in place and working with a professional with experience, access to tools, and a shared goal can potentially ease some stress when life takes an unfortunate turn.
5. People Are Living Longer
The modern world has provided us with the benefit of longer lives. Today, 1-in-4 65-year-olds will live past 90. Not many would argue living longer is a bad thing, but it does have a few complications. Living longer creates the necessity for stretching your financial resources. Does your current retirement plan account for an additional 15, 20, or even 25 years?
These facts can be scary, but they don’t have to be. Retirement is more than a mere “savings” game. With all the variables included, having a wealth management professional in your corner could make the difference. With a well thought out financial plan, you could make your “golden years” genuinely golden.
The Priebe Wealth Management Group‘s goal is to provide our clients with support and guidance, working together to understand and plan for their financial goals. Schedule time with one of our financial advisors today to start mapping out your financial journey.