A recent survey shows that most Americans are terrified about their retirement savings, or lack thereof. Because of decreased interest and concernment about our retirement, so many American's don't even consider 401K plans before choosing an employer.
This is your future you are gambling with here, and it is important to get educated and be smart when planning out your savings. Before agreeing on employment at a business, make sure they offer retirement, and be active in your planning. Because of the common fear for our futures, I asked Jim Poolman from Indexed Annuity Leadership Council to answer some questions for me addressing some of our top questions regarding retirement savings.
Why do you think that most American's are afraid of running out of retirement money?
"When you see just a quarter of Americans having not a single dollar saved, I think there's a real and legitimate fear that they'll run out of retirement money. Not only are Americans worried they won't have enough funds to get them through retirement, they're also worried about having enough savings to cover basic necessities."
The survey shows that 25% of Americans worry about outliving their income. How should we prepare our retirement funds differently now that life expectancy is longer?
"One of the biggest pieces to making sure you're not outliving your money is making sure you have a balanced portfolio that includes both high-risk options and conservative options, like Fixed Indexed Annuities, that can offer guaranteed lifetime income."
What's the best way for those who started saving later on in life to grow a decent retirement savings fast enough to retire at a normal age?
"Take advantage of free money. If your employer offers a 401(k), try to contribute the maximum. This instantly increases the amount of money toward your retirement savings"
Why is it that most millennials have less than $5K saved for retirement?
"This generation came to age during the economic recession and an estimated 40 percent have student loan debt, which can have a significant impact on the ability to save for retirement. No matter what age, start saving something for retirement. Even if it's just 1 percent of your salary this can grow dramatically over time. The earlier you start saving the more time your money has to generate interest."
What can you do to continue getting income after retirement, aside from working?
"A great option for still receiving income after you retire is having a product that offers an assured income stream for as long as you live, such as a Fixed Indexed Annuity. FIAs also protect your principal regardless of market ups and downs. "
What is a good amount to have saved up by the time you retire, that will last you your lifetime?
"The total amount you need in retirement varies from person to person, but the best way to know what the right number is for you is to make a plan, taking into account lifestyle, healthcare costs and basic necessities. Those who make a plan are three times more likely to meet their goals. The IALC has a free, easy to use calculator at FIAinsights.org. "
Do you think that Americans should be more educated on the importance and requirements of a substantial retirement fund?
"There is a big knowledge gap when it comes to retirement. In fact, more than a quarter of Americans don't even know how much they have saved. That's why the IALC has been working to educate Americans about their retirement choices. Specifically, we're working to educate consumers on the importance of a balanced retirement portfolio and incorporating options that can provide a steady stream of income in retirement."
Are many retirement-age individuals discovering that they have to work later in life than they intended because they don't have enough saved up?
"Right now, 1 in 4 Baby Boomers--the generation closest to retirement--have less than $5,000 saved for retirement. This is troubling and I think you'll see many of these Americans working later in life or outliving their retirement savings. That's why it's critical to make a budget, build a balanced portfolio and continually adjust your plans."
How can people find you online?
"At our website, IndexedAnnuitiesInsights.com