Most of us have a good idea of what we want from retirement, but we need a better understanding of how to make our expectations a reality. Have you given thought to what type of income you can expect when you retire? A dramatic change in the way we view retirement is taking place throughout the workplace in America. We are realizing the traditional retirement sources of yesterday may not be enough to fund our retirement dreams of tomorrow. The actual number of employer pension plans are diminishing while Social Security benefits remain at risk. The need to utilize our ability to enhance our personal savings and invest wisely is ever increasing. Thus, we are undoubtedly becoming more responsible for finding our own financial security. Ultimately, we must replace the desire to save for retirement with the need to save for retirement. Many financial experts estimate that only 10% of people establish a financial plan. Statistics show that human life expectancy has risen and therefore we should be prepared to spend at least 20 or more years in retirement. Living longer in retirement will ultimately lead to increased income needs, and current studies indicate that we should plan to maintain up to 70% of our pre-retirement income. According to the U.S. Bureau of the Census, the current average income sources for retirees are comprised of the following components:
As we can see, a personal retirement savings plan can greatly supplement our retirement income. By reviewing some additional governmental statistics, we can better understand the importance of a personal retirement savings plan. According to statistics from the Social Security Administration (SSA), www.ssa.gov, the information below gives us an indication of the Median Income of Retirees. Median Income, by age, 2000* | ||||||||||||
*Source: SSA Income of the Aged Chartbook, 2000 |
Saturday, June 20, 2009
Why Save For Retirement?
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