Saving for Retirement – Will You Have Enough?
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3 Little-Known Factors That Could Affect Your Saving for Retirement
PinI don’t want to be the one that bursts your bubble, but even as we are saving for retirement, the plain fact of the matter is that many of us will be working until the day we die. I can hear gasps of disbelief, and yes, some are laughing at this silly notion.
We see the stock market at record highs, and even this fragile economy is showing some signs of recovery. So why the doom and gloom comment? I’ve been planning for retirement for a few years now, and have some money put away, so isn’t my retirement safe?
I wish that I could say yes, but there are many outside factors that come into play. The first problem is the social security system that our lawmakers have made a mess of. This system was set up to provide retirement benefits for workers that paid into it. Now, it is practically bankrupt because funds are paid out in benefits that have nothing to do with retirement.
Do you think our lawmakers and most US government workers pay into social security? No way, they have their own private retirement plan and when have you ever heard of their “Plan” being adversely changed? To top it off, many retirees from the government system take jobs in the private sector just to get in the required quarters of work and then collect social security in addition to their pension benefits.
There are going to be more drastic changes in the future to social security, and probably a cut in benefits that many retirees won’t be able to accept. The retirement age has already been increased and in my opinion, the monthly benefit decrease isn’t too far off. As these changes take place, is your retirement plan buffered with increased savings to cover this shortfall?[bctt tweet=”Three factors that could affect how you are saving for retirement…” username=”HBSMoneyTips”]
What about Medicare? The current administration has already set in place plans to cut Medicare payments to physicians and other providers in hope that this program may be salvaged.
The fraudulent payments from the Medicare system are in the billions of dollars and fake businesses continue to operate “business as usual” and steal funds that are needed for care for our elderly. But, do our lawmakers attack this problem?
Of course not, instead of trying to stop this fraud in a serious way, our elected officials continue to put a “band aid” on the problem. After all, it’s so much easier to cut benefits intended to help the elderly. Plus, if they came down hard on these thieves, it might offend them, and heaven forbid, violate their right to earn a living. What a sad and disgusting example of leaders of our country.
All of those factors mentioned above will have an adverse effect on our retirement. In addition, when you factor in that more retirees are living longer, it will take more retirement dollars to cover our expenses.
You can be certain that healthcare will be a major factor. Insurance carriers are already raising premiums in anticipation of Obamacare kicking in. These are really serious issues that were unknown twenty or thirty years ago when we began planning for retirement.
Many large businesses will no longer be able to afford a retirement plan for their employees due to the increased costs associated with Obamacare. Also, as employees feel the squeeze with increased medical insurance premiums and other medical care, they will be unable to properly save for retirement. Most will be forced to work longer if their health permits, and many others will probably try to find a part time job assuming the job market improves.
You don’t have to look too far or too hard to see how all of the above factors will affect our retirement. Inflation is much higher than current interest rates, another reason we will work longer, health permitting. Saving for retirement will take many, many more dollars than any of us dreamed.
I may sound like Dr. Gloom, but there are company sponsored retirement plans failing today, and home values are still down considerably. Even though our unemployment rate is allegedly improving, other countries are not so fortunate.
The same problem exists in many other countries throughout the world. How would you like to be living in Greece, or Portugal, or a few other countries that are in serious financial difficulty because of years of increasing debt? And yes, their problems will have an effect on us.
Individuals who were saving for retirement there have difficulty getting access to their money, assuming its still there. I hear comments from the elderly in other countries when they say that they must work until they die, and it is not a pleasant thought. We’ve been saving for retirement so that we would be able to travel and spend time with our family, but that dream is fading.
I’m not so much concerned for myself, but mostly for our children, who are a number of years from retirement. What have we left them? A social security and Medicare system that is in total disarray with little chance of improvement and questionable survival. They’re saving for retirement now and we can only hope that it will be enough.
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39 responses to “Saving for Retirement – Will You Have Enough?”
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Every time I see those ‘Freedom 55’ commercials, I have to laugh because the reality is as you say it, most of us will be working until the day we die. In this economy, most people barely get by and there just isn’t anything left to put aside for retirement. It’s not like we’re all drinking Starbucks, so we can’t even shave that off the budget! Of course, there is always some way to skim off the top, but when you’re living paycheck to paycheck, it’s really hard to find any fat.
I sure hope our country doesn’t fall for the scam of privatizing social security. They say “oh you can’t trust government” ….. so ….. do we really want to trust instead the private corporations that caused the downfall of the entire economy? At least government has some accountability built in, via elected officials and multiple means of filing complaints and demanding fairness. But with private corporations? They are all about profit, not the common good.
Many of us dream of being financially free in our retirement years, but ninety percent will do nothing about it. The curse of youth is to believe that their whole lives are ahead of them. Your article made me realise to start planning now while factors are more in your control.
I agree, the social security system is a big mess and government should try to fix this mess. Unfortunately, the mess is very big and it may take a while to fix this.
Regarding saving money for retirement, if you manage your money well you can save well for your retirement.
It is all about managing your money well when you are younger.
There is really no reason for medical insurance costs to be going up because of Obamacare. Again, it’s the greed of the few causing pain for the majority of hard-working every day citizens. Insurance companies are being forced to stop a few things that have been grossly unfair for generations – like canceling policies when you actually need care, and refusing to cover anyone with pre-existing conditions – but don’t think for a minute that they are “suffering” from the new Obamacare system: they will make a fortune off the MILLIONS of newly-insured people. They are only raising rates because they can whine and act like victims, and use it as an excuse to raise rates.
What really irritates me is when “fiscally conservative” so-called leaders call Medicare an “entitlement.” They throw it in there with food stamps and welfare. But senior citizens PAID for these benefits out of every paycheck they earned – for decades. Penalize the greedy drug companies and insurance companies who jack the prices up – rather than make senior citizens pay for getting what they invested in.
Most of us really want to retire and enjoy a financial free life but the problem we have is we fail to plan and a saying goes thus “he who fails to plan, plans to fail”… your post was really helpful, I really need to update my retirement planning.
These tips are really tremendous. I think it would be effective for all. Thank you for sharing with us. I hope everyone like these tips as me. Keep it up.
Preparing for retirement is SCARY. I think the best bet is working as long as you can. My mom’s best friend… she worked full time well into her 80’s. She worked part-time until she was 85, and now is enjoying a full-fledged retirement. So admirable. Makes me rethink my definition of hard work.
Yes, retirement can be quite intimidating. If you start early putting money away and are physically able to work longer, you can have a much more comfortable life.
My mom is retiring later this year, and I think she learned a lot by my dad’s early retirement. Save save save! And now she’s prepped for a solid late-life future. I think she’ll be great, though she will return to part-time work when she can. You can’t stop a busy body!
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We struggle with retirement funds here. As of right now, I’m 26 and have nothing put away into retirement (then again I’m out of work at the moment). My husband had to spend his retirement money to start over again about 10 years ago, and then he had to wait five years at work for his employer to start putting money into a retirement fund for him. As it is he’s going to have to work until he’s 70 at the rate money is going into the retirement fund to be able to retire. I’m still hoping to come up with some good money online in my online endeavors to start building up my own retirement account as well as start bulking up his. It’s going to be a struggle.
You’re in good company, so many couples were either forced to spend their retirement funds because of unemployment, a horrible market, high cost of living, etc,. Plus, increasing the retirement age each year doesn’t help either.
Your actions right now will directly translate to a smart future especially in retirement. Pension savings, investments and many other saving methods once taken up only mean one thing; that the benefits accrued over time are immense.
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I can only say how thankful I am to be on sound footing financially, like you. I am praying for the poor seniors of Greece and Portugal.
Yes, sometimes we forget just how fortunate we really are in the USA. I was reading several articles on the problems in Greece and so many of the elderly there haven’t received pension payments for months because of a bankrupt government. Thanks for your reminder Kate.
At 55, I see exactly where you’re coming from. My retirement age has already been raised to 67 1/2 and I, too, can foresee the upcoming monthly benefit decrease. It’s a shame what our lawmakers are doing to this country.
Planning for the future is so important. But it’s so true that the people that should really be thinking about their future are the people in their 20s. That’s really the time to start planning for retirement, as ridiculous as that sounds. The real problem is that most don’t, which is why many people work until the day they die, and retirement age keeps getting pushed back. But, I suppose as long as you do something you love, working isn’t such a bad thing.
Richard, you’re so right. We preach the same philosophy but I suppose individuals in their twenties have a feeling that they have plenty of time to start saving for retirement. Then when they’re in their late forties, they begin to realize that life is rather short, and they scramble to set up retirement savings. At least, those that are financially able do. I wish we had the solution to this problem.
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I’m really not looking forward to Obamacare. Actually, I have very little idea what it even IS. Why isn’t something like mandatory healthcare breaking news?! I’d rather hear about my financial future than Kim Kardashian’s baby daddy!
I’m only 25, but like the post mentioned, I have already started putting money aside for retirement. I’m definitely not relying on Social Security, especially in its current state!
You really have to plan for your future as we do not hold our own life. There are many medigap insurance policies out there that can be a cheap source of your health benefits. Obamacare or Medicare alone can’t be enough in some circumstances.
I am already saving for my retirement, so me and my wife don’t have to worry about a thing in our old age. I really don’t to be a burden on my kids at that age as they will have a life and expenses of their own.
Thanks for your comment Krystal. Glad to hear that you’re saving for the retirement we all dream about. We agree, none of us want to be a burden on our children, they will have problems of their own.
This tips are both great and useful. They seem effective and makes you count on them. Thank you so much for posting this informative article!
This is one thing that is terrifying g to me, It is almost like being punished for working I put money aside for retirement, I almost assume there is not going to be retirement left for me…I am 34 I really hope this all resolves itself!
It is a scary fact that many Americans will be working until the day they die. This is because of three important reasons:
1) Social Security is on the verge of bankruptcy
2) Cutting Medicare
3) Ongoing fraud payments from the Medicare system, which is stealing funds from elderly for their care
Thanks for stopping by Luis. Yes, we agree on your reasons mentioned above. Unfortunately through mishandling, fraud, & now Obamacare, social security & Medicare recipients will have a difficult time making ends meet. Social Security will grant a 1.5% increase on January 1, but will more than likely increase the Medicare premium as well, negating the increase. Providers will be receiving less in reimbursements, so out of pocket costs will increase as well. Many retirees, if they are physically able, will have to find some type of work to provide additional income just to survive. What a sad example for a nation who is supposed to be the most affluent in the world.
Thanks Gust, really appreciate the reply. I know I have a lot to learn about this issue and its great to talk about the good and bad. Very informative points. I will for sure share and stumble this article with my followers.
Thanks for your comment, we appreciate it.
I believe that we really need to save for our retirement so that we could travel and spend more tie with our loved ones. It is so heartbreaking to hear that some elders are saying that they need to work hard until they die. I am only in my mid 20’s and I am now planning to save for my retirement.
Plan is the most powerful asset for everyone especially for those who going to retirement soon. I think your advice really help them for long time and it will bring positive results. Save on retirement without planning can’t bring positive result. Thanks for your great share.
I agree with all your information and I think Insurance providers are eager to partner with customers who are unlikely to experience a mishap and file a claim. If you have gone claims-free for some time, you’re deemed less likely to file a claim in the future. Your claims-free history makes you good business, so you might be able to snag a discount. If I am wrong please quote the point.
Yes, you’re right on the mark. Insurance companies love you when you are paying their premiums, but as soon as you have a claim to file, they are not so eager to assist.
I still have more than 20 years to retire and now I am going to use your advice to plan my retirement for the coming years. I am sure I will retire a billionaire.
Billionaire huh? Sure wish you the best and hope that you can accomplish that.