Where Do You Stand with Your Retirement Planning?

Published on June 27, 2017

National Retirement Planning Week—yes, there really is one—was in early April, and retirement industry experts stressed—what else?—the importance of saving for retirement. For some people whose companies offer a workplace retirement plan, such as a 401(k), it can be easier to save with automatic payroll deductions and the employer’s matching contributions.

However, the Insured Retirement Institute (IRI) has issued a research report called “Boomers Expectations for Retirement 2017,” which looked at retirement confidence and preparedness among baby boomers. One might think that these older workers or retirees have been preparing and saving for a long time. But the IRI’s research found that only 60 percent of this population believe their retirement income will be sufficient to cover basic expenses and afford them the funds for travel and other leisure activities. In addition, sixty percent of boomers said that Social Security will be a major source of income for them in retirement; this is the highest percentage recorded in the seven years that the IRI has produced the report.

The IRI report came up with another troubling statistics:

• Less than one-quarter (23 percent) of the baby boomers surveyed believes they have enough saved up to sustain them throughout their retirement.
• Just a little over half (54 percent) felt they had enough money saved.
• Out of this group, approximately 60 percent of them have at least $100,000 saved today—which sounds like a lot but given the actual cost of living and medical expenses that come with advanced age, it is likely these individuals will spend their savings much more quickly than they anticipate.

At least that group has something saved. The National Foundation for Credit Counseling found that about one-quarter of U.S. adults (27 percent) don’t save any part of their income for retirement.

• Two-thirds were putting money in a savings account.
• A little less than one-third had a 401(k) plan.
• Twelve percent saved money at home. The NFCC shows these are more apt to be younger adults.

Add to that the constant threats to the Social Security Trust Fund, and it points to Americans needing to find ways to save more and boost their retirement portfolios, since we cannot know whether or not the benefits will be there when it comes time to retire, or whether cost of living allowances will increase commensurate with inflation and consumer prices at any given time. Don’t forget, Medicare doesn’t cover everything … including long-term care expenses.

More boomers are still working
The Institute’s report also found that few baby boomers are still working full time (25 percent) than were in 2011 (50 percent) when it began collecting this data. Another doubled difference over the seven years since IRI began its research, which correlates with this, is that nearly twice the amount of baby boomers (about 40 percent) stated they are now fully retired; it was only around 20 percent back in 2011.

Self-direct and change your retirement standing
Whether you’re a baby boomer nearing retirement or a younger worker with decades of employment ahead of you, it’s always a good time to open a self-directed retirement plan and turbocharge your retirement savings.

Self-direction as a retirement wealth-building strategy is for people who are comfortable making all their own investment decisions, and for those who know and understand alternative assets and wish to include them in their retirement portfolios. Real estate, commodities, precious metals, private placements, and loans and mortgages are some of the many nontraditional investments you can include in a self-directed retirement plan. The account administrator, like Next Generation Trust Services, executes the transactions based on the account holder’s instructions, holds the assets, and handles all the required paperwork and reporting related to the assets. Any type of retirement plan can be self-directed; if you have a 401(k) at your place of work, and you’d like to self-direct your investments, ask your employer if this is possible with your existing plan. If you wish to open a new account, our New Accounts Page will walk you through getting the account open; and, our professional team at Next Generation will always answer any questions you may have about the types of assets allowed within these plans.

Want to position yourself better for a more comfortable retirement through self-direction?
Contact Next Generation Trust Services at Info@NextGenerationTrust.com or 888.857-8058.