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Do You Have
Enough of a Financial Cushion for
Retirement?
By: Lisa Bromma
While Social Security's future
continues to stir debate and make headlines, a separate issue of retirement
financing is drawing wide-spread attention behind the scenes. Put simply,
approximately 70% of Americans are living paycheck to paycheck and have very
little to no savings set aside for retirement.
What's worse is that the vast majority of working Americans approaching
retirement age will retire without health benefits for themselves and their
families. This will unfortunately result in more and more people having to
depend on relatives for money to purchase prescription drugs and healthcare
and/or government-assisted programs for health benefits. From the average
worker's perspective, lack of financial planning during employment will
inevitably result in less money in your wallet, financial uncertainty in your
retirement years and higher taxes over time.
In this week's article, Lisa Bromma describes the real-life financial
frustrations, struggles and uncertainties most Americans face after retirement.
She then goes on to provide rock-solid financial advice on how to avoid becoming
an unsuspecting statistic!
I just spent Mother’s Day with
two retirees: my mother and my daughter-in-law’s mother.
My mother is fortunate. Her
husband left her in a satisfactory position financially. Although she still
worries whether she’ll have enough money as the years go by for expenses like
prescription drugs, doctor bills and rent increases on her condo, she knows
she’s not alone and does have financial resources.
My daughter-in-law’s mother is a different story. She receives Social Security
and some child support for a late-in-life baby, but she just can’t make ends
meet. My daughter-in-law has put her on a strict budget, yet still has to help
her out financially.
Two women of the same age and different circumstances, but sharing one
commonality: They never thought they would have to worry about money when they
retired. Now, this is all they worry about. And they’re not alone. About
two-thirds of surveyed retirees said their monthly expenses are about the same
as or higher than before retirement. In
other words, the purported 70% of current income needed to cover one’s expenses
in retirement turns out to be unrealistic.
Health care is becoming the No. 1 expense in retirement. Even with Social
Security and Medicare, retirees are spending out of pocket because health
insurance premiums and all health-related costs are higher than expected. And
then retirees are finding that travel and entertainment are costing more than
predicted. For those who were counting on profiting off their personal residence
when they downsized into a retirement community, they’re finding that the profit
doesn’t cover as much as they thought it would. Nursing homes, assisted
living…for most retirees it is out of the question.
In general, the pre-boomer generation was better at saving and preparing for
retirement for a number of reasons. We can learn from our parents—or
grandparents, depending on your age—by putting away as much money as possible
and investing in assets that will help you during those retirement years. You
cannot afford to depend on Social Security and Medicare to cover your needs 10,
20 or more years from now. Whether you invest in stocks, funds, real estate or
businesses, the bottom line is that you need to save, even if it is just a few
hundred dollars a month. Start now to grow that nest egg and retire free from
worry.
Certainly money is not everything. Health, family, and enjoying life are of the
utmost importance. However, don’t ignore that money does matter, no matter where
you are in your cycle of life. Money plays a role in keeping good health,
providing for your family (or not being dependent on them providing for you),
and pursuing the interests that you enjoy, whether it’s travel, volunteering to
help others, or a particular hobby. You can help
yourself to help your future.
If you would like more information about using a self-directed IRA or 401(K) to
pursue the investments that are important to you, visit The Entrust Group at
www.theentrustgroup.com
Lisa Moren-Bromma has been a real estate investor since 1978, a note investor
since 1998 and has worked with some of the top private mortgage institutional
buyers. She is President of The Entrust Group, the nation’s largest network of
self-directed IRA administrators, and the author
of Real Estate Investing for the Utterly Confused, and Wise Women…invest in real
estate. Please visit her website at
http://www.wisewomeninvestor.com Or
http://www.theentrustgroup.com
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