Monthly Archives: February 2017

Is Social Security Enough Income for Retirement?

Social Security Card and American Currency

Social security is a major source of income for older Americans, but is it enough to support your retirement?

The National Academy of Social Insurance says one in four Americans aged 65 and older are using Social Security as the sole source of income. That means the other 75 percent of the retired population may be finding these benefits are not enough to cover expenses in retirement.

Of course, the Social Security program was never designed to cover all of retirees’ expenses. The monthly benefits only replace about 40 percent of the average pre-retirement income, with the remainder left to the responsibility of retirees.

In order to work towards filling this gap in retirement, you may want to plan on saving between 70 and 80 percent of your pre-retirement income. That sounds like a lot, but there are ways to help spur those savings over time. (If you currently have a pension, you may be able to adjust your personal savings and investments.)

For example, you may want to consider making contributions to an IRA or 401(k), which help your money grow tax-deferred until retirement. This can sometimes supplement your social security benefits and help you cover the basic expenses and support your retirement lifestyle.

Wondering what your expenses might look like in retirement? According to the Bureau of Labor Statistics, Americans aged 65-74 spent an average of $4,123/month in 2015. If you consider the average monthly social security benefit is $1,360, then even two people on social security can’t cover the monthly expenses with their combined $2,720/month.

Whether you’re close to retirement or have a few decades before that time, you can always start saving for your later years. It can be to your advantage to explore a few options that include social security but don’t depend on it as a primary source of income.

 

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Stock investing involves risk including loss of principal.

This Isn’t Your Parents’ Retirement

2 Retirees in Leaves with Feet in Air

Retirement doesn’t have to be up in the air – but it’s probably different than your parents’ experiences.

Pensions, early retirement, and spending the Golden Years at active adult communities are practically relics. Nowadays, some Baby Boomers are looking at an entirely different type of retirement from the one their parents had, and those who are even younger may see additional changes as they plan for the future.

How Retirement is Different Today

The full retirement age for social security benefits is 67. For decades, the full retirement age (FRA) in the eyes of the Social Security Administration (SSA) was 65 years old. That has changed, however, and for anyone who was born in 1960 or later, the FRA is now 67 years old. Your social security benefits may vary depending on when you were born and when you start to collect.

Out with the pension, in with the 401(k). According to the U.S. Bureau of Labor Statistics, just a quarter of Americans working today have the security of a pension – most of them union members. Due to rising costs, many employers dropped pension plans and replaced them with employee retirement programs, such as the 401(k). This puts the burden of saving for retirement on employees, making it even more important to contribute enough to your retirement plan.

The line between work and retirement isn’t much of a line. Due to the changes in social security benefits and employee retirement plans – and because people are living longer in general – you may need to work more years than your parents did in order to have enough money to retire. Of course, some “retirees” are going back to work not only for cash flow but also because they genuinely enjoy working.

Fewer commitments to retirement communities. Once upon a time, retirees flew the coop for warmer climates and heavily advertised retirement meccas in Florida and Arizona. Nowadays, some retirees are choosing to age in place –modifying a current home to accommodate physical changes later in life – or are transferring to foreign countries where the cost of living may be cheaper.

We’re living longer, and that’s costing more in retirement. Medical advances have made it possible to extend our life expectancies; however, some people may require even more medical and health care as they age. In fact, the average 65-year-old couple will need upwards of $400,000 to cover health care in retirement, according to Fidelity Benefits Consulting..

The days of spending retirement as an “extended vacation” seem like a fairytale, but that doesn’t mean your retirement has to be anything less. In fact, now that you know what to expect, it can help you be even more prepared for the lifestyle you want to have…whether that’s opening up your own business or starting adventures in your new home abroad.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Insurance guarantees are based on the claims paying ability of the issuer.

Women and Finances: Why Women May Need Life Insurance

3 Smiling Women of Different Ages

Some women may need life insurance to protect their futures.

Women’s roles at home and in the workplace are evolving and – along with them – contributions to household finances. Women may need life insurance to protect the value of those assets as well as the non-tangible duties that may help to keep the home running like a fine-tuned machine.

How Women are Creating Financial Assets   

There’s no doubt about it, women are super creative when it comes to generating income for themselves and their families. Whether as a single woman, single parent, or aligned with a spouse or partner, some females are finding new ways to continue working and/or balance the home-work life.

For example, mompreneurs – women who set up and run their own businesses as well as care for their children – are increasing along with a growing number of females who enter the workforce. According to the U.S. Department of Labor’s infographic, women’s participation in the labor force is up by 53 percent between 1963 and 2012. The National Association of Women Business Owners says one in five firms with revenue of $1 million or more are woman-owned businesses.

Women May Need Life Insurance for Protection

As we can see, women are making important financial contributions. While some women are staying in the workforce for their entire careers, others are finding ways to balance parenthood and careers. But no matter which approach is preferred, it can be critical to protect those financial assets with life insurance.

Life insurance is like a safeguard for the spouse and/or the rest of the family. If the woman dies, then a life insurance may help cover funeral expenses and cover the day-to-day bills or outstanding debt. This also means the family won’t have to disrupt an existing savings or retirement plan to manage the household expenses, which can keep their future plans in tact.

For women who handle the majority of the household tasks and care for their children, a life insurance policy may help the family cover the costs of childcare, transportation, and household chores if the woman should die.

Women may need life insurance today more than ever before. It not only makes it easier on a grieving family, but it can also safeguard the financial future of everyone involved.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Insurance guarantees are based on the claims paying ability of the issuer.