Broker Check

Retirement: Ready or Not

August 21, 2013
By Dr. Allen Rumble & Brandon Singer, CFP®

We’re facing a Retirement Readiness crisis of immense proportions.

Newscasts are filled with news about Egypt’s political unrest, athletes using performance-enhancing drugs, possible 2016 presidential candidates, and what’s happening next on Duck Dynasty. However, few seem to even notice what may be considered to be an elephant in the room: The retirement readiness crisis of epic proportions.

78 baby boomers are reaching retirement a rate of 10,000 a day...and will continue for the next 18 years. Of those, 95% haven’t saved enough during their 40 years of work to fund a 20-30 year retirement. 46% have less than $10,000 saved for retirement; 29% have less than $1,000. 33% have saved nothing at all. In fact, 56% have outstanding debt when they retire.

88% of all Americans are worried about “maintaining a financially independent standard of living in retirement”. According to the Center on Budget and Policy Priorities, the average Social Security monthly benefit is $1,234. That’s $14,800 a year, which puts one just above the poverty threshold.

Personally, we feel this is the crisis no one is talking about...but somebody needs to!

The retirement facing Baby Boomers is not that same as that of our parents and grandparents. In 1991, half of all American workers planned to retire before age 65. Today that number has plunged to just 23%. Company pensions are nearly extinct. Employee contribution plans like (401K, 403B, etc.) have shifted retirement liabilities from companies to the employees. Today, 74% of baby boomers expect to continue working once they “retire” with 40% planning to work until they drop.

There are a couple of key issues that are principally responsible for these historic changes: Longevity - The good news is that we are living so much longer. The bad news related to retirement is that we’re living so much longer. Retirees today have to plan for the longest retirement in history – 20, 30, even 40 years. Indeed, some spend as long in retirement as they did working.

In 1900, average life expectancy was 47 years. Today, this has increased to 78. However, one reaching age 65 in good health today has a 50% chance of living to 85/88. One in four will live into their 90’s.

The other culprit is Health Care Costs. Nearly half of high-net-worth individuals say they’re “terrified” of what rising health care costs may do to their retirement planning. Out-of-pocket health care expenses, including Long Term Care, for a 65 year old couple retiring today can easily reach $300,000-$400,000 or more. And Medicare, it covers approximately ½ of one’s health care costs.

Finally, inflation (Purchasing Power) is a third issue that can essentially disintegrate one’s retirement planning.

We believe it’s prudent, even essential, to address these challenges NOW. Think of it this way. We’re on a plane from New York to L.A. The fact is, we only have enough fuel onboard to make it to Chicago. When’s the best time to address this shortfall, en route at 33,000 feet or on the ground before take-off?

One of the premium services we provide is a no cost, no obligation “On Demand” retirement readiness EDUCATIONAL presentation called, “How Big Is Your Retirement Shortfall?” It can be viewed in the comfort and privacy of home or office 24/7.

It’s just 14 minutes & 46 seconds long, but it addresses head one the 10 biggest issues facing retirees today.

I want to reiterate, this is an educational seminar and is not selling or touting any product, concept, or strategy. It’s intent is to simply get pre & post retirees to pause and consider their future financial health.

To visit the Retirement Readiness Presentation visit:

Dr. Allen Rumble & Brandon D. Singer, CFP® have pursued a singular mission to develop retirement income plans to help clients insure their “golden years” are just that, truly golden, and in the process, help clients create an income stream for life.

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