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Today, and every day for the next 16 years, it’s estimated that 10,000 Baby Boomers will turn 65. That’s a staggering number of people nearing retirement! And with the average lifespan of American’s increasing, it could mean spending up to 30 or more years in retirement for some.
It is important that before participants stop working that they are financially prepared to do so. Establishing a budget is an important step since no more paychecks coming in means less financial flexibility.
Ideally, if you’re in your 50s, you should be getting close to your retirement saving goals. But that isn’t always the case.
Plan participants in their 50s can take advantage of catch-up contributions which allow them to contribute extra money to their retirement plan. For 401(k) plans, that means in 2013 someone over 50 can contribute an extra $5,500.
It’s National Save for Retirement Week. It’s a great time to consider how you could help plan participants in their 50s enter the home stretch in their retirement planning.
For most of those in the millennial generation, retirement planning feels incredibly far off when they’re trying to find money to pay student loans or purchase the latest iPhone. A recent survey however, did find that not having enough money for retirement was a top concern for those ages 18 to 29.*
A recent report from the Employee Benefit Research Institute (EBRI) found that more than 1 in 5 workers expect to retire later than they thought 12 months ago. A higher than expected cost of living and change in employment were included in the list of top reasons for workers changing their expected retirement age.
Additionally, the report found that 47% of retirees left the work force earlier than planned. Reasons such as health, changes at their companies and caring for family members led to retiring early.
A recent poll from the Associated Press-NORC Center for Public Affairs Research found that 47 percent of workers 50 and older now expect to retire later than they previously thought. Additionally the survey found that 1 in 6 reported having less than $1,000 in retirement savings and 1 in 4 working respondents aren’t saving for retirement outside of Social Security.
We’ve all seen the statistics – despite the rising cost of retirement, research shows 75 percent of Americans have less than $30,000 in retirement savings. That alone is a great reason to check in with your clients to see if their participants are doing everything they can to save for the future. But if you need another reason, National Save for Retirement Week is being celebrated in just a couple of weeks from October 20 – 26.