Tag: create wealth
Retirement Plans Being Jeopardized? Need to Increase Your Retirement Monies?
by admin on Oct.19, 2009, under General
Risks to Your Retirement Income
Assuming you’re part of the Baby Boomer Generation, you’re likely giving serious thought to retiring – if you haven’t already retired. And if you have previously left work, you may be evaluating if you’re going to be able to remain retired.
Today’s economic crisis aggravates the retirement question considerably by compounding the following retirement related risks:
1. Life Expectancy Has Increased
Today, life expectancies are longer than their parents’ generation. For example, in 1970, a 60-year old white male had a life expectancy of an additional 16.2 years; however, by 2008, his life expectancy had expanded to twenty years.
So how is the Baby Boomer going be able to afford to pay for those additional 3.8 years? Following are several possible solutions:
> Expedite pre-retirement nest egg building
> Work longer
> Move in with family members
> Accept quality of life
2. Rising Health Care Costs
Predicting and planning for ways to cover one’s health care costs are some of the most difficult financial planning tasks, largely because medical costs are so individualistic, with needs varying greatly from one person to another. Long-term care needs are even more difficult to predict and arrange adequate funding.
Health care costs have grown more than 5% (inflation adjusted) for the past 15 years – and that is greater than the increase in family income. Medicare costs will probably rise as well at similar rates.
3. Legislation May Affect Retirement Income & Supplemental Programs
It has been widely reported that the expenses associated with the major entitlement programs (e.g., Social Security, Medicare, and Medicaid) are growing more rapidly than other sectors of the economy, and some experts challenge their long-term viability because of the cumulative effects of increased life expectancy, size of the retiring population, and increasing health care expenses in general.
Moreover, immediate questions concerning continued health insurance during retirement, and at what financial levels, are rampant in today’s economy – and these questions are given even more fuel by the reorganizations occurring, especially among the auto industry.
We are still witnessing much discussion concerning a national health care program – but such discussions have been active for decades, with few results to show for those efforts. Although President Obama will be leading such efforts this year, most people anticipate a lot of opposition from Congress.
Most people think that seniors over age 55 will be exempted from cuts in these entitlement programs, but providing complete coverage for them is a two-edged sword – doing so increases the likelihood of a new value-added tax, which would likely add to retirement tax burdens.
4. Sometimes One’s Retirement Date is Dictated, and not a Free Choice
According to a 2004 Health and Retirement Survey (HRS), 37% are forced to retire due to feeble health or downsizings, etc.
5. 401Ks Became 201Ks
Did your retirement savings (including your 401k) take a major hit with the stock market meltdown in 2008? My investments were deeply affected. Many people saw their 401k and other stock market accounts take a 50% hit, which has led many comedians to rename them “201k”. For many people, their 401k was the bulk of their retirement savings, so this stock market meltdown substantially damaged their retirement plans.
Humpty Dumpty Was Not a Retirement Expert
Some of the news is good news. You can fix a broken “nest egg”.
You can work an extra year or two, take a part-time job or work from home to supplement your earnings, start your own business, etc.
If you’d like to start an online business, but are hesitant because you’re not an internet expert, a excellent place to start for gathering all the education about internet marketing that you will need to be successful is to sign up for the Online Success for Beginners classes.
A study by Butrica, Smith and Steuerle (2006) indicated that working just one (1) extra year can improve annual retirement income by 9%, while working just five (5) extra years can generate an additional 56% annual retirement income.
If you’d like to learn how to produce a supplemental income, so that you can have a rewarding, financially secure retirement, check out Darren Salkeld’s new MaxPro Marketing System and get his FREE Report and FREE Audio describing the age-old secrets of creating wealth.
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