Planning for Retirement when you can Hope (or Fear) Living

Planning for Retirement when you can Hope (or Fear) Living to 90

Everyone knows that they need to start planning for retirement sooner rather than later. In fact, starting at 22 or so would be perfect. It does typically take that long to gather enough money to support yourself for the 30 years or so that you can expect to live after you retire (chances are actually 50% that anyone retiring today will live to be about 90). And yet, what with the fact that there few people who actually see their careers progressing the way it would, people don't often have enough money to set aside. Often, they find that they aren't even setting aside enough for real expenses that are far more urgent and pressing - such as saving for a child's college. The children of baby boomers - people who are in their 30s and 40s today - are likely to have far tougher retirements than their parents did. In fact, the first retirees among the baby boomers, who in fact will set off into retirement this year for the first time will find that their retirement is a lot harder than they ever thought it could be. But at least they have their pensions as inadequate as they are, that their children will never have.

It can never be too late. Even if you are 60 today, and plan to retire in 10 years. Aggressively contributing to a retirement account can always take you long way. The government is considering introducing a new automatic individual retirement account that will provide retirees with that guaranteed paycheck that they all really hope for. It'll be something that they will be forced to contributes to all their lives, and it will be something they can count on in addition to their Social Security. But what do you do do if you have already retired? Planning for retirement may not really be that tough? There are still strategies that you can take up to help improve your quality of life.

But the first thing you can do would be to buy an annuity - something that will give you a steady paycheck to your last day - something to supplement your Social Security. You could also get a reverse mortgage (even if that may not seem like such a smart idea now that home values are in quite a decline). The problem is that everyone realizes that people are living longer and longer. We certainly don't have any institutions that are able to support people into their 90s. People right now really have little option but to consider working an extra five years before they retire. Planning for retirement can be really don't diving into uncharted waters when you realize that you could be living 30 years after.

Everywhere you look, experts seem to have little else to say other than to ask you to work longer. If it isn't working full-time, they ask you to consider working part-time for 10 years after you actually retire. Actually, there are a number of factors that have all conspired to make things this way for those who hope to retire. To begin with, Social Security never covers anyone for more than 30% of what they used to make. On top of that, whatever people investing in the stock market these days rarely translates to healthy returns. And most corporations are moving their workers from regular pensions to the much more stingy 401(k). In places like Wisconsin and New Jersey, even government employees are having their pensions attacked.

To which, the experts just have one solution: forget about living life like you are American. You need to go live your life a couple of levels below what you believe you can afford.

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