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Make Better Plans for Retirement

The week of October 25 was National Save for Retirement Week. Did you hear anything about it? I didn’t. Be that as it may, the upshot is that Americans are not financially prepared and we need to make better plans for retirement.

This [is] an educational campaign to raise public awareness about the importance of long-term retirement planning. The program, created by bipartisan congressional action, encourages Americans to utilize retirement savings and investment plan strategies. The week also encourages individuals to reflect on their current financial situations and their potential for a secure retirement.

Make better plans for retirement

There are no hard-and-fast rules we can follow to provide for a secure retirement, but here are some thoughts on the process and how things look for Americans.

1. How much money do we need to retire? There’s no real rule of thumb.

2. Half of Americans aren’t saving for retirement.

3. 80 is the new retirement age?

4. The majority of middle-class Americans aren’t confident about the stock market.

5. Women are less engaged in retirement planning.

6. More Americans have tapped retirement funds.

8. Forty percent of Americans fear lack of retirement funds.

No matter how you parse the data, a secure retirement for most Americans is becoming the new American Dream and many of us will never achieve it. The only way to do it is to make better plans for retirement.

Click here to watch a short video clip and read more about how to make better plans for retirement.

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Middle Class Americans are on the Edge of a Retirement Cliff

Nearly all Americans are pessimistic about their retirement years — and with good reason. A recent survey of 1,000 people conducted by Harris Interactive for Wells Fargo quantified the bad news, revealing that middle class Americans are on the edge of a retirement cliff.

Middle Class Americans are on the Edge of a Retirement Cliff

According to the survey:

  • 53% are not confident they will have enough money saved for the retirement lifestyle they want.
  • 30% expect they will have to work until at least 80 to have a comfortable retirement lifestyle.
  • 73% believe their employers do not want them to work in their 80s.
  • 70% of middle class Americans expect to work during retirement.
  • 39% believe they will have to work out of financial necessity.

By any objective standard, it’s clear the American Dream, whatever you believe that to be, has been replaced by the Retirement Nightmare.

Joe Ready, director of Wells Fargo Institutional Retirement and Trust observed:

It is so tough for Americans to save for retirement, and we feel it is very important to keep shining the light on this issue. People say they’ll work longer, but how possible will this be for millions of Americans? Preparing for retirement can’t be kicked down the road because the other picture that is emerging is how many people will live very close to the poverty line in retirement. We’ve got to marshal our resources as a country, an industry and as individuals to deal with the issues creating this cliff.

An ironic statement, given that financial institutions like Wells Fargo are, in a large part, responsible for the devastating economic crisis that faces us and are perpetuating the situation by promoting retirement plans and investments that siphon money out of the middle class and into those institutions’ bottom line profits.

Middle class Americans say they will need a median of $300,000 to support them in retirement, but to date, have only saved $25,000 (median). When asked what percentage of their nest egg they expect to withdraw annually in retirement, the median withdrawal predicted by middle class Americans is 10%. Many experts say withdrawals should be maintained at three to four percent.

That’s a huge gap to cover, especially if you’re already in your 50s — or even worse, 60s. Savings accounts and CDs return almost nothing and result — at best — in a slower, safer loss of your money. 401(k) plans are proving to be disastrous for many reasons. Middle class Americans are on the edge of a retirement cliff. Now what are we going to do about it?

Click here to read the Wells Fargo press release presenting their findings


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