How well are you prepared for retirement? If you are like most middle-class Americans, you probably don’t have hundreds of thousands of dollars saved up yet for your retirement, and unfortunately, you probably don’t have the plans in place to make what you do have grow as much as you need it to. Why are so many seniors not as prepared as they could be? One of the biggest reasons is that financial subjects can be intimidating, scary and even depressing, as it forces us to face our mortality and come to terms with the financial situations we will potentially face, like paying for long-term assisted living care, doctor or hospital care, and more. It can seem easier to stick our heads in the sand and hope for the best—but this certainly does not solve the problem.
That’s why it is so important that we start planning for our retirement years, as early as possible, so we can set goals and objectives, and ultimately plan for financial security to carry us through the money issues we may encounter after we retire. There is no one retirement savings plan that fits all. Instead, you should base your strategy on your income, objectives, and level of risk you’re comfortable with. Everyone’s needs are different, but one thing is the same: those who don’t have even basic plans for retirement are likely to end up with financial difficulty after retiring.
What about government benefits?
What about governmentally funded plans for seniors, like Social Security, Medicare? Aren’t they enough to provide for seniors after retirement? In most cases, no. While they do help supplement the money needed to maintain your household and health, they generally are not able to provide enough means for seniors to live at the same standards they are used to. In fact, the average monthly Social Security payment is $930, according to the Social Security Administration. That averages out to $232.50 a week, which is far short of what most of us need to live our lives we way we want to.
Medicare does help provide seniors with federally funded health care coverage. You are eligible if you are 65 or older and have collected Social Security for at least two years, or have a disability, all regardless of income. However, Medicare premiums continue to rise, so be careful. In addition, although Americans can collect Social Security once they turn 62 years old, the age at which they are eligible for full benefits is slowly increasing.
Planning ahead is the key
But a little investment planning goes a long way, and is not nearly as complicated as you think. Remember, not all of it is high risk or requires a large amount of money to begin with. Your best bet is to speak with a trusted friend or loved one for initial advice. Your local bank is also a good starting point. They can explain methods beyond simple savings accounts you can use to sock away savings so that it can grow. If your church has a seniors group, join it and ask for financial advice and opinions. Prefer to research on your own? Visit the local library for books on investing basics and make sure you ask the library staff to steer you in the right direction for resources geared to seniors, as there is a massive amount of general investment material available that may not be pertinent to you and your situation. Narrowing your search can save you valuable time.
Don’t avoid it—embrace it: It’s never too late to make basic retirement savings plans!
