How Expensive is Retirement?

Do not underestimate the costs of retirement.

What is the most costly purchase you have made?

Your home?

A college education?

A wedding?

Your retirement will have a far higher price tag.

The average cost?

More than $700,000.

That is more than three times the average cost of a home.

According to a recent Credit Union Times article titled “Retirement Is ‘Life’s Most Expensive Purchase,” Americans tend to spend money they should be saving for retirement.

Why?

According to a Merrill Lynch and Age Wave report, 81 percent of Americans are clueless when it comes to the cost of retirement.

The younger you are, the less money you will be receiving from the government for retirement.

Social Security alone will not float your lifestyle boat.

What does this mean?

You will be responsible for funding your retirement lifestyle.

Another reason you should save more?

You are expected to live longer and will consequently have a longer retirement than your predecessors.

What are the reasons you are not saving for retirement?

Are you like 42 percent of Americans who have little left to save after paying basic living expenses?

Are you like 38 percent who are paying back debt?

There is nothing wrong with either of these reasons, but you should also make retirement planning a priority.

You can know you need to do something, but it does you absolutely no good whatsoever unless you take action.

Most Americans believe saving a quarter of their disposable income is their goal.

They are not doing it.

So, how much on average do people save?

The number is significantly lower at 5.5 percent of their disposable income.

Quite a gap.

How does this compare to retirement savings at other times?

During the recession, people saved a low 3 percent on average.

After all, most folks had nothing ... and no income.

In the 1970s, people saved a much higher 13 percent.

How can you save more?

Realize that financial security itself is a purchase.

You should save for it as just like you would for a home or car.

Ultimately, you just need to commit and take action.

Remember: “An ounce of prevention is worth a pound of cure.” When making your financial, tax and estate plans, do not go it alone. Be sure to engage competent professional counsel.

For more information about estate planning in Overland Park, KS (and throughout the rest of Kansas and Missouri), visit our estate planning website and be sure to subscribe to our complimentary estate planning e-newsletter while you are there.

Reference: Credit Union Times (February 17, 2017) “Retirement Is ‘Life’s Most Expensive Purchase’”