Life changes quickly, doesn’t it? One day, you’re young and strong with your whole life ahead of you, and the next thing you know, you’re taking advantage of the senior citizen discount. How did time move so fast?
We all have regrets, things we wish we could go back and change, but life doesn’t have a rewind button that lets us amend our decisions. What we do have is an opportunity to learn from our mistakes and the mistakes of others and make different choices going forward. This will help lead us to a better future.
I often talk in this space about financial matters, life insurance, and planning for retirement. It’s what I do professionally and one of my areas of hard-earned expertise. My husband, Lee, suffered a stroke at age 51 that turned our world upside down. It had a profound impact on our personal life, our business, and our finances. I’ve shared with you the story of my mother and how a stroke at age 78 altered her life; she had been living independently in her own home and suddenly had to leave and move in with me. I’ve explained the financial impact it had on her life and mine.
Seeing and personally experiencing the difference in the lives and families of those who make a financial plan and those who don’t is what compels me to continue working to help people make choices that bring peace instead of regret.
If you have a retirement plan, I urge you to review it on a yearly basis or sooner if you experience any life changes such as marriage, divorce, job change, or death of a spouse, just to name a few. If you don’t have a plan or have not fully implemented your plan, here are a few statistics I hope will spur you into action:
The average American retiree receives $1,413 in Social Security benefits a month; your number may be higher or lower. My mother was fortunate that her benefits were higher than average. What would yours be? With reserves continuing to deplete, the Social Security Administration recently reported they expect an aggregate cut of 23 percent in benefits in 2033. How would that affect you? You can determine your current projected number by going to SSA.gov and signing up for “my Social Security”. Once you know your number, ask yourself if you believe you could live comfortably with that income in your retirement years.
The average retirement age is 66, and projections are that many retirees will live up to 30 years in retirement. My mother retired at 61 and lived for another 22 years; she outlived her retirement savings by two years. Had she been living on her own, her funds would have run out much sooner. Would your retirement savings support you for 20-30 years? Be sure you consider the impact of taxes, inflation, and market volatility or loss; it will substantially affect not only your account balance but the amount of money available for withdrawal. Ask your advisor if these items are factored into the projections they provide you. What is your backup plan should you run out of retirement savings?
In a 2020 study, 58 percent of survey respondents deemed their retirement savings inadequate and graded their retirement savings sufficiency at a C or lower. The recommendation is to have $1 million in retirement savings. I’m a baby boomer, and statistics say 45 percent of us have no retirement savings. Unfortunately, many people don’t ramp up their savings until they reach their 60s, so it’s no surprise that 1 in 12 people believe they will never be able to retire. What about you?
Many people who do what I do, don’t like to work with younger people. They tend to have less money to set aside, and they don’t just take what they are told at face value; they ask a lot of questions. I don’t feel that way. I enjoy working with them. Why? My daughter is 27. I know the impact that starting a plan at an early age has already had on her life. She is ahead of the curve. I see how she is teaching beneficial principles to her friends; in fact, it makes me very proud. I know if I can help young people begin a plan, it will have a positive effect on their lives and the lives of their families. It’s never too soon to start a plan.