Washington, DC - Recent reports of an increased rate of bankruptcies among America’s senior citizens provides a new incentive to prepare for retirement, according to Dan Weber, president of the Association of Mature American Citizens [AMAC].
“It’s not as easy as it used to be to retire. It’s even harder to imagine early retirement these days. So, for the over 50 set, in particular, it is time for a reality check. Ask yourself ‘do I have a plan’ and if the answer is no, you’d better start making up for lost time,” says Weber.
Meanwhile, President Trump has stepped in issuing an executive order that would “expand access to workplace retirement savings plans for American workers.” Weber notes that the order is aimed at lowering the costs for small businesses to create retirement plans for their employees. It would also let small business owners pool resources to create retirement plans. In a recent interview with iHeartMedia’s Sally Adams, Weber also explained that the order would allow employees to put away more money in IRA and 401k accounts for a longer period of time.
He told reporter Adams, “Right now, you have to start collecting from your IRA or 401K at 70 1/2 years old. Many people are still working at 70 and don’t want to take out money that’s making money for them quite yet. This will allow them to have some flexibility.”
Most of the experts on the subject of retirement agree that the average 50-something-year-old is ill prepared for retirement. Many of them will tell you that a family man, these days, will need a million dollars in savings. That may seem like a lot but people are living longer in this day and age and things are only going to get more expensive as the years go by.
Social Security can supplement retirement savings, but bear in mind that the average recipient currently receives a monthly benefit of $1,329. And, if you decide you want to retire earlier than the Full Retirement Age [FRA] of 65 to 67 years old, bear in mind that your benefits will be reduced. For example, if you decide to file for Social Security at age 62, it can be 20 to 30 percent less than it will be at your FRA.
If you want to see what you’ll have in your retirement, the American Institute for Economic Research offers a handy retirement calculator. It will tell you how much you’ll be able to safely spend from your savings when you retire.
Weber notes that “many of us will decide to continue working in either full-time or part-time positions in order to supplement retirement savings and income. We’re also making life-style adjustments such as reassessing our housing needs.”
He noted that more than 80% of those in the 65-plus-age bracket own their own homes in the U.S. and that in the great majority of cases their homes are their single biggest asset. “So, it stands to reason that when the kids grow up and move on, many of them start thinking about downsizing by moving into more efficient and affordable housing.”
Or, he says, you may want to consider moving to another part of the country where the weather is better, the cost of living is lower and there are no local income taxes. “However, it can be difficult to choose that option if it’s a big move and there are other considerations such as proximity to friends and family.”