How to Survive the Retirement Crisis

There is a new financial crisis looming and it’s about retirement.

It seems like people aren’t getting the message that they need to take control of their own financial futures. Here are some of the factors leading to the retirement crisis.

Lack of savings
These numbers from a study by the Employee Benefits Research Institute (EBRI) paint a bleak picture: 66 percent of workers have saved less than $50,000 for retirement and 36 percent have saved less than $1,000. Most employers are ditching pensions in favor of 401(k)s, so it’s really up to the employee to make sure they are prepared for retirement.

Living longer
People are living longer which means they need more money for retirement. Only about one-third of people are financially prepared to live into their 90s according to Northwestern Mutual Life Insurance.

Health Care costs
Even with Medicare and supplemental policies, a couple can easily spend more than $250,000 out of pocket on health care in retirement according a report last year from Fidelity Investments.

Social Security changes
If you’re born in 1960 or later, your Social Security full retirement age is 67 up from age 66. In addition, if there are no changes to the Social Security program, younger workers may get less in entitlement benefits than they paid in taxes. 

Whether you’re already retired, soon to be retired, or not planning to retire at all, the more you are in charge of your financial future, the less you have to worry about the impacts of outside forces. To do that, you need to understand your current financial situation, the risks and potential returns for your current investments, and strategies to potentially improve both.

Even if you feel you have a good handle on it all, I recommend getting a knowledgeable outside person’s input. Many financial professionals provide free or low cost financial check-ups. If you don’t already have a specific financial professional in mind, ask for recommendations from family or friends. That third party validation can provide peace of mind that a retirement crisis will not impact you. I’d love to help you as well.  Email me at roger@cowentaxgroup.com.

Need help with your finances? Cowen Tax Advisory Group can help. With more than 35 years in the business as trusted tax and retirement planning advisors, we treat our clients like family, take pride in our work and make it easy! Find more at cowentaxgroup.com

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Investment advisory services offered through Wealth Financial Advisory Services, LLC, a Registered Investment Adviser. Insurance services are offered separately through individually licensed and appointed insurance agents.

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