Retirement Ain't What It Used to Be

Look into the future and you can see that retirement isn't going to be what it once was. The traditional company pension is virtually extinct. One study found that in 2007, only 17% of workers had company pensions, while 63% had 401ks. Fidelity Investments report that as of March 31, 2010, the average 401k balance was $66,900. Even if you assume you'll collect social security, those numbers don't portend the kind of retirement we've all envisioned. Add in escalating health costs, a battered real estate market and other factors, and it looks like most of us are not going to have sufficient funds to live on.

The crisis has not gone unnoticed in Washington. On June 16th a Special Senate Committee on Aging will convene to discuss various approaches to remedy the situation. One methodology being kicked around these days is changing the 401K structure to incorporate some sort of annuity, thus guaranteeing post-retirement benefits. Of course, an annuity is not necessarily failsafe, either!

 

So what's a retireee - or would-be retiree - to do?  It's never too late to plan, particularly if you are still in your working years. You may have to save more, you may have to work a few years longer, but there are options. Let's see what Washington comes up with in the months ahead. Read more.