One of the looming financial crises in our country is what we might label the "Boomer money gap." A primary reason that Boomers want to continue to work well past the traditional retirement age is because they need the income. According to a recent study by the Transamerica Center for Retirement Studies, 66 percent of Boomers plan to or are already working past age 65 or do not plan to retire at all. Half plan to continue to work after they retire, mostly for income and health benefits.
Sadly, the study indicates that the estimated median current household savings of Boomers in all retirement accounts is just $147,000. Most Boomers are woefully under-funded when it comes to their retirement years. Even if Boomers can live on a modest annual income, life expectancies reaching into the 80s will mean stretching financial resources longer than anticipated.
Most Boomers, reports the study, expect Social Security income to be part of their retirement, but a third (34 percent) think it will be their primary source of income. About three quarters (78 percent) of Boomers expect retirement income to come from such retirement savings vehicles as IRAs and 401(k)s.
Retirement expert Mark Miller notes in an article for The New York Times that typically, social security income "replaces just 39 percent of pre-retirement income for the average worker retiring at 65..." He includes a number of strategies from financial planners for improving retirement income for those who haven't saved enough money. Among the ideas: "ramping up" contributions to retirement plans, waiting as long as possible to file for Social Security benefits, continuing to work past retirement age, downsizing a home or paying off a home mortgage, and understanding when to draw money out of retirement accounts. The article is well worth reading.
Probably the best thing my wife and I did to ensure a financially secure future was choose a competent, impartial financial planner. We have worked with this same professional for over twenty years, and never has that person been more important than in guiding us during our retirement years. Even though I was a successful small business owner, I could not have set and met life goals or managed investments without the help of a financial adviser. If you're facing a retirement money gap, get a professional to assist you.