Most people think the basics of retirement planning never change – Work, save, retire. However, while the process may be the same, savers are facing some challenges in 2021 that preceding generations didn’t have to be concerned about.
Because things are changing so rapidly, you probably need to find a good source for financial planning Huntsville AL. Until then, here are some things everyone needs to know.
The Challenges Facing Today’s Savers
Just like today’s workers, retirees are looking for ways to supplement their Social Security benefits, while still earning a living. This may have been the primary challenge for earlier retirees who had a 401 (k) or IRA.
With the new rules of pandemic living, the gig economy and other sources of income require a new retirement strategy.
Key Retirement Planning Steps
While it may be tempting to put retirement plans on hold during your early years of retirement, the strategy is not the best approach. Unfortunately, most Americans don’t work past age 65. In fact, less than half of Americans age 65 and older are currently employed, and those who are working tend to be working part-time or making significantly less than they did during their working years.
This is where professional financial planning in Huntsville AL comes into play. Most of us need a professional to guide us in a strategic retirement plan that works now and will keep working in the future.
Life Events and How They Affect Your Retirement Plan
The percentage of American adults age 55 and over who own their own homes has dropped from 78.2% in 2007 to 70.8% today, according to the 2018 Retirement Confidence Survey.
That survey also revealed that homeowners are having to work an average of 1.9 more years in retirement than previous generations, primarily to cover increased costs associated with homeownership. Homeownership rates have declined since the recession of 2008, and the recent shift to renting has many households anticipating a smaller, but more expensive, post-retirement lifestyle.
Family medical expenses have also risen and are now above previous generations. The survey found that 86% of adults age 55 and older reported that they had spent $1,000 or more on medical expenses.
The Bottom Line
Even though some of the things that make up a retirement income plan are the same as what you might have done before, today’s financial landscape creates some distinct challenges. Don’t be fooled into thinking your savings will keep up with the inflation rate of your retirement years, or that it doesn’t matter what you save. However, it is important to have a financial plan in place that will guide you through the five-step process outlined in this article.
The reality is that the shift in the global economy, just like the shift in your life, is challenging your expectations. It’s crucial for you to evaluate your current options and resources so that you are not caught off guard.