On this week’s episode of Tape Talk we consider the question “Is Retirement Dead?” With the changing landscape of retirement today due to saving shortfalls, diminishing pensions, and increased life expectancies, is retirement still the picturesque dream it used to be?

Is Retirement Dead?

The Washington Post recently ran an article painting a bleak picture of the state of retirement in America. One of the stunning facts from the article is the idea that many people are now putting off retiring until later in life. Also, Social Security is buying much less than it did for retirees a decade ago. Given these facts and the reality that many Americans have saved less than they need in their retirement accounts we are forced to asked the question, “Is Retirement Dead?” 

 

What Is Retirement Anyway?

Retirement as we know it is a relatively new concept. To start, we looked at in our episode on pensions the fact that the modern pension system in America is only about 100 years old. Plus, when first created, the purpose was not to provide retirees with a 20-30 year retirement but to allow workers who lived past their life expectancy an opportunity to not try and maintain the same work-level they had done previously. Eventually, as life expectancies grew and retirement savings evolved we arrived at our modern landscape where people attempt to work for 30-40 years with hopes of a 20-30 year retirement. The problem with this is the math doesn’t always work. Pension systems have caught on to this and have started shifting the need to save, and the risks that go along with that savings, back to the employee. This means we may need to alter our expectations for retirement today.

 

What to Expect From Retirement.

You’ll get out of it what you put into it.

Your savings rate and your discipline at all stages of your saving and retirement journey are going to affect your outcome. This is because, once your retirement finally comes, you can’t use what you haven’t saved or what you’ve tapped before retirement. What’s going to be there will only be there because you put it there.

Your goals are only as good as your realities.

The vision you have for retirement is going to affect your required savings and your required rate of return. If you have ambitious ideas for retirement it’s important that the amount you are saving is equally ambitious. Remember, a goal without a plan is simply a wish.

Retirement may be more of a journey than a destination.

There was a time when retirement meant you simply stopped working. Now, however, you may transition towards retirement in multiple steps over the course of years. Your retirement plan should look at options, as needed, for how you might move from full-time to part-time to on-demand work before you fully retire from working for good.

 

How A Plan Comes Together.

One of the most important aspects of what we help clients with as a wealth management firm is their LIFE Plan. It’s through this financial planning journey that we assist clients in examining their goals and dreams while comparing it to the resources they have available to meet those desires. Through this process, we assist clients in finding their required rate of return before implementing their plan and aiming to keep them on track throughout their financial journey. We wrap up this week’s show with a look at what that process is like and what goes into crafting each individual’s plan.

Want to get started on your own LIFE Plan? Downloading and completing our LIFE Plan Questionnaire is the first step in the journey. Once you’ve completed and submitted it, our team can begin working with you to craft your own personal plan.