Ready or not, here they come. America's
baby boomer generation-more than 78 million
strong- is experiencing a new "coming of age" as
the eldest of the baby boomers enters their 60s.
While the age of Aquarius is giving away to
retirement age, many are rethinking how they
will spend their retirement years- and coming to
grips with their long-term financial
security.
The prospect of retirement for boomers is
one that affects a considerable portion of
America. In 2030, more than 26 percent of the
entire U.S. populations will be aged 65 or
older, compared with only 17 percent today. In
addition to the sheer size of the group,
these population projections get a boost from
increasing life expectancies. Currently, a
65-year old man can expect to live to 81 and a
woman of the same age is expected to live to
84.
Due, in part, to the fact that people are
living longer and healthier lives, some 80
percent of boomers plan to work after retiring.
In fact, the Bureau of Labor Statistics projects
that the number of employed Americans ages 55 to
64 will increase by 51 percent between 2002 and
2012, while those ages 65 to 74 will
increase by 48 percent. That means by 2012
about 1 in 5 American employees will
be 55 or older.
As extended life expectancies change
the rules of retirement, those in their 50's and
60's must "get real" about their financial
futures, whether they intend to work or not. The
question remains, "Will my nest egg last
throughout my retirement years?" As most experts
estimate that retirees typically need at least
70-80 percent of their pre-retirement income for
a secure retirement, statistics show that
retiring Americans could use a financial reality
check:
- 44% of Americans age 55 and older have saved
less than $100,000
- Only 13% of these Americans have saved
$250,000 ore more- while 30% didn't know how
much they had saved.
- Only about 205 of workers have traditional
pensions available
- Health is unpredictable and medical expenses
are not always covered by health insurance. An
estimated 73% of older persons do not have
sufficient income and assets to be able to
withstand a long-term illness or disabling
condition totaling $150,000 over 3 years.
- The US DOL reports that the average American
spends 18 years in retirement.
The good news is that boomers have
options to help fund their retirement. First of
all, continuing to work after age 65 can
literally pay off. Those who retire at 65, work
2 days a week and earn 40% of their
pre-retirement salary can increase their savings
by 30% over 5 years. It is also encouraing that
85% of boomers participate in 401(k) plans, the
highest partcipation of all age groups. The key
is contributing as much as possible into such
plans. Likewise, putting money into an IRA may
gain tax advantages and grow one's nest egg, but
it's important to consult with a tax advisor for
specific advice.
Article content provided by Jim Ferrari.
Jim Ferrari is Financial
representative with The Northwestern Mutual
Financial Network, specializing in individual
and business planning in the greater Rochester
Area. Contact; direct 585-734-7283, office
585-248-4743, e-mail [email protected] on
the web at
www.nmfn/jamesferrari.
Northwestern Mutual financial network is
the marketing name for the sales and
distribution arm for the Northwestern Mutual
Life Insurance Company, Milwaukee, WI (NM), and
it's subsidiaries and affiliates. James E.
Ferrari is an insurance agent of NM (life
insurance, annuities and disability income
insurance) and Northwestern Mutual Long Term
Care Insurance Company, Milwaukee WI, a
subsidiary of NM (long-term care insurance), and
a Registered representative of Northwestern
Mutual Investment services, LLC, 6314 Fly Road,
E Syracuse, NY 13057 , a wholly-owned company of
NY, broker-dealer and member NASD and SIPC. NM
is not a broker-dealer. There may be instances
when this agent represents insurance companies
in addition to NM or its
affiliates.
