North County Times > It's Your Life
Start Now if You Want to Retire Rich
by Candace Bahr
Would you like a comfortable retirement? Most people would. But unfortunately, statistics show that most Americans are not prepared for retirement.
The 2008 Retirement Confidence Survey released in April by the Employee Benefits Research Institute revealed that only half of the workers surveyed have accumulated savings, investments, and retirement savings of $50,000 or more, and a quarter of those surveyed had no savings at all. No wonder that only 29 percent of people in the survey felt confident they would have a secure retirement.
But surely the younger generation is learning from their parents' mistakes?
Not necessarily. Younger workers are the least likely to participate in workplace retirement plans according to another EBRI survey. Only 29 percent sign up for their retirement plans at work, compared with 60 percent of employees in the 55-64 range.
Women aren't any better at planning for retirement than their male counterparts. According to a May 2007 MetLife study of mothers and adult daughters and their attitudes about retirement, daughters are almost twice as likely as mothers to have debt of $25,000 or more (22 percent vs. 12 percent). Single women are likely to retire later than married women, and most daughters expect to retire later than their mothers did.
Many people simply plan to work until they drop. But as we live longer, that is becoming less of a possibility. According to Social Security statistics there's a 41 percent chance that a 62-year-old woman today will live to be 90, while a man has a 29 percent chance. So working until you die isn't an option for most of us.
Early retirement can also be costly. Opt for reduced Social Security benefits at age 62, and you may lose a significant amount over your remaining life span. If you retire early and live to 90, you'll forgo $39,000 in lifetime benefits, and you'll sacrifice up to $54,000 in lost benefits if you live to 95.
Health care is becoming a bigger problem for retirees. This year's Retirement Confidence Survey showed that only a third of workers expect to have employer-paid health insurance in retirement, as more and more companies are eliminating health care coverage for retirees.
In short, Americans are unprepared for retirement, which means we will all be working longer or trying to seek other means of covering the shortfall we face. Next week I'll tell you what you and those you love can do to counteract this trend and jump-start your retirement savings.
