Financial Security in Retirement Defined
What is financial security in retirement? This articles defines retirement security as:
“The accumulation of sufficient capital by a target retirement age to be able to buy a guaranteed, lifetime, inflation-protected retirement income payment that, in combination with Social Security and any employer-provided benefits, allows the person to maintain their desired standard of living.”
There are several considerations when looking to define financial security in retirement. The various factors include lifespan, lifestyle, desired retirement age, your age when you began to plan for retirement, social security benefits, pension or 401(k) and 403(b) type payments, what you want to do with your time and savings.
You will notice that the definition does not include post retirement earnings. Why? The primary reason is simple. Predicting future income needs is very difficult particularly when you don’t know how far short you are of your financial goals. You must begin planning when your are young and make enough money throughout your working years. You also must be organized and disciplined in budgeting your money and be healthy enough to carry it out. Yet, for way to many of us, plans get derailed and we are unable to retire with security.
Key facts regarding our financial insecurity
The National Institute on Retirement Security (NIRS) reports that most people, when they retire, have $3,000 – $12,000 to their name. 74% of Americans are living paycheck to paycheck and stressing out about money. Households fight over which bills to pay and debts pile up. The number one reason for divorce is financial stress within the household. And divorce produces more financial stress.
According to the NIRS, 88 percent of Americans believe that the nation faces a retirement crisis. This is a slight increase from 2015 (86 percent). The level of concern is high across gender, income, age and political party affiliation. Importantly, “more than half (55 percent) strongly agree that there is a crisis.” I find these numbers daunting and you should as well.
The NIRS also reported that Americans overwhelmingly believe that pensions are a better strategy toward retirement security. According to this report, politicians fail to understand our fears and are not doing enough to solve the problem. I believe this reveals that a large majority of people don’t believe that they can, or will, achieve financial security in retirement.
So what are the options
The common definition of insanity is repeating the same action expecting a different result. If we don’t believe that we can achieve, then we probably won’t. However, when we make the decision to act for our own best interest, instead of waiting for government, pensions, or social security, then we begin to take control over our own lives and best interest. One great option is entrepreneurship and starting your own home business. The costs and risks are low. The benefit, if done correctly, is extremely high. There are many reputable companies, selling great products, by which you can earn additional income. The power of residual income is amazing once you tap into it.
What would you look for in a company
Financial security in retirement is more than possible, even if you are quickly approaching your retirement years. How? Look for a company with high integrity and leadership, mentors to guide the journey and quality products in a market that is hitting an important new trend. There are companies with generous compensation plans and opportunities for true growth. If you are looking to elevate your life, live financially secure, and go Above and Beyond what you think is possible, then contact me. There are real alternatives and meaningful opportunities available.