2012 will be the year I really plan for my future retirement. I already made a New Year’s resolution to finally hire a financial advisor and when that happens I want to discuss 12 particularly scary retirement statistics.
In my opinion, these “12 Terrifying Retirement Facts Keeping Boomers – And Their Advisors – Up at Night,” recently released by Financial-Planning.com, are essential discussion for advisors and baby boomer clients.
The gist of these facts is that Americans are pretty unprepared for retirement, especially considering that they can no longer count on programs like Social Security, Medicare or pensions to fully cover retirement expenses.
The aging US population, underfunded pensions and potential changes to US government spending policy make it unlikely these programs will exist in the future as they do today.
Even more terrifying — many Americans will likely have to work long past the age of 65. In other words, “retired” may no longer mean a life of leisure. Instead, it may come to mean having to work, if there’s still a concept of retirement at all.
So, what are some of the scary statistics cited by Financial-Planning.com? According to the Employee Benefit Research Institute, nearly 30% of all American workers have less than $1,000 saved for retirement. Another sign that Americans aren’t planning adequately for retirement — between 1991 and 2007, the number of Americans between the ages of 65 and 74 who filed for bankruptcy rose by 178%.
Meanwhile, over the next 20 years, more than 10,000 baby boomers will retire daily and by 2050, there will be nearly 90 million senior citizens in the United States. That is more than double today’s 40 million figure. Finally, 74% of American workers expect to have to work when they are retired, and 40% of baby boomers “plan to work until they drop.”
According to Financial-Planning.com, appreciating these scary numbers can help baby boomers “ensure they’re properly prepared” for the retirement they envision.
I agree. To me, the facts emphasize the importance of upgrading retirement savings now to avoid some of the more dire scenarios like bankruptcy and never-ending work.
That’s why this year I’m doing the legwork necessary to make sure I can retire with the lifestyle I want, one that hopefully will be characterized more by dream trips to Italy and Antarctica than by clocking in at work.
