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America we have a problem! According to recent Gallup polls, the average retirement age is 62 and working Americans expect to retire at age 66. Assuming that one would enter the American work force at age 25, that would equate to 37 active working years before reaching our anticipated retirement age.
Data compiled by The Social Security Administration states a man reaching 65 today can expect to live, on average, until age 84.3. A woman reaching 65 today, can expect to live, on average, until age 86.6. We can credit medical technology for advances in medicine which contribute to prolonged life spans.
While these statistics concerning life spans are attractive, this presents a problem for our Social Security Administration. Americans are living longer and the working population shrinking. Individuals are now faced with making decisions to plan for shortfalls that Social Security benefits can’t provide.
Unfortunately, when researching statistics on the percentages of Americans saving or prepared for retirement, its evident that only a few are taking the retirement crisis seriously. Here are a few things to consider when planning for your retirement:
- What age do I plan to retire?
- What is my desired lifestyle in retirement?
- What is the monthly/annual income required to support such lifestyle?
- Will I be carrying any liabilities into retirement outside of basic living expenses?
- How long do I have to save for retirement?
- Where do I save and how much interest should I receive in order to reach my desired goal?
- How much interest is needed to outpace inflation and taxes?
- Will I receive any benefits from Social Security, and if so, how much?
- What amount have I saved thus far, and what financial product am I saving it in?
- What are the tax liabilities on my current savings?
As always, as a licensed certified financial educator, I recommend seeking professional support and guidance in answering these questions as well as selecting the appropriate financial solutions. Let us all rise to the occasion when it comes to planning for our future. In doing so, we can decrease the probability of falling into expected life events financially unprepared.
About the Author: LaShonda Johnson is a licensed certified financial educator. She is a native Houstonian with 2 children and 3 grandchildren. Her background includes 16 years in Corporate America in management, sales, training and development, and 10 years as an independent capital medical equipment distributor. LaShonda’s passion is to provide financial education to as many individuals and families as humanly possible. Her goal is to empower people with the financial knowledge necessary to help them proactively plan for their future. You can email LaShonda at: firstname.lastname@example.org, and be sure to visit her website at: Houston Housewives of Finance.
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