Weekly Commentary for July 16, 2012
Retirement may be closer than expected for many Americans. According to a new study by the Center for Retirement Research at Boston College, more than 85 percent of households will be prepared to retire by age 70.
When calculating retirement finances, 65 is typically listed as the age of retirement. But many Americans who have not saved adequately often assume they will have to work their entire lives to afford the cost of living. The study, titled, “National Retirement Risk Index: How Much Longer Do We Need to Work?” finds that many of those American concerned they have to work “forever,” will only have to work one to six years beyond age 65, depending on the size of their savings and investments.
Currently, 51 percent of today’s working households are at risk of being unable to maintain their pre-retirement standard of living in retirement, but this percentage is calculated based on the standard retirement age of 65. The longer people work past the age 65, the more the percentage of risk falls. From this, the report concluded that a vast majority of households would be ready to retire at age 70 instead of 65.
The study estimates that 23 percent of U.S. households would need to work one to three years beyond age 65, 17 percent would need to works four to six years and 9 percent would need to work seven years or more to obtain retirement readiness.
Longer life expectancies. The study concludes that with today’s workers having longer life expectancies, “working longer is feasible for most households, and it does not mean working forever.”
Risk assessment. If you are concerned about the possibility you or a family member may have to work “forever” to afford retirement, contact your Denver investment advisor, Jordan Dechtman, at 303-741-9772 or email him at Jordan@JordanDechtman.com. Retirement may be closer than you think.