Facing the Financial Facts of Retirement

6:00 pm Retirement Planning

confused woman e1346097420696 Facing the Financial Facts of RetirementFinancial planning for retirement can be difficult for many people, mainly because of the stark realities many of us are reluctant to face. Among those realities are:

You will likely spend 20 to 25% of your life in retirement. At the standard retirement age of 65, most Americans will live an average of another 20 years. This is a long time to live on savings, and many have not committed the financial resources to cover a lengthy retirement.

Inflation erodes the value of your money by 50% every 22 years. According to the Consumer Price Index, inflation in the U.S. over the past century has gone up an average of 3.2% every year. This means that prices double approximately every 22 years. For those entering the workforce that believe $1 million will be enough to save for retirement, you will probably need four times that amount.

Bank accounts no longer produce reasonable income. According to the Federal Reserve, a $100,000 short-term CD would have produced over $4,700 in income just five years ago. Today, that same CD would generate less than $200.

Social Security benefits average just over $1200 per month. In 2013, the average annual retirement benefit will be less than $15,000 per year. For most of us, Social Security alone will not support a comfortable retirement.

Health care costs continue to rise. It is estimated that we will spend $240,000 on medical and health care costs over our retirement. Personal savings will need to close the gap between what Social Security benefits and Medicare provides and these anticipated expenses.

Contact us today for individualized planning strategies to meet your unique needs.

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