The ‘7 Deadly Sins’ Of Retirement Planning

New survey shows why millions are unprepared

Being A Boomer, we were born just after World War II, between 1946 and 1964, and raised during the biggest, most sustained economic boom in human history.

Some of us were sent to college, and grad school, by their doting parents when it was relatively still cheap — or nearly free.

And then, being taught how to work for someone, went out to work, they were able to accumulate stocks, bonds and real estate just as prices began to skyrocket. The Dow Jones Industrial Average was just 1,000 in the early 1980s, when most boomers were first entering the workplace.

So after all this good luck, where are they now?

A new study has the numbers. And they aren’t pretty.

“Boomer Expectations for Retirement,” According to a report from the Insured Retirement Institute (IRI)—makes shocking reading. Most boomers are unprepared for retirement, even as they approach it or enter it. Amazingly, barely one in 10 has enough saved up.

This is not the first or last study to report on Americans’ poor retirement savings. But the IRI survey stands out because it focuses specifically on boomers. They interviewed 804 people aged 56 to 72.

The numbers speak for themselves, about 11% have at least $500,000 saved for their retirement. This is not an optimal amount, but it may have to do.

The rest of the group is not even close

Nearly half don’t have any retirement savings at all. None.

Wow. About half of those who make it into their early 60s will live past 85. I don’t know how they’re going to get by without a savings plan or a system to accumulate more income during retirement is anyone’s guess.

In this report, the IRI shows an astonishing seven “deadly sins” of retirement planning which have led so many to this dismal situation.

Here are seven things not to do when planning for your retirement.

  1. Not saving enough — or anything. Yes, it’s the most obvious but it’s worth repeating. According to the IRI survey, an astonishing 23% of baby boomers have no retirement savings… and never did.
  2. Draining your retirement savings. Another 17% did save for their retirement once… but then spent the money, either in desperation, or carelessness, or maybe both.
  3. Not calculating a retirement savings goal. It’s a lot harder to save enough for retirement if you haven’t first at least tried to work out how much that’s supposed to be. Astonishingly, just 25% of boomers who do not have a financial adviser have tried to run the numbers. And even 25% of those who do have a financial adviser still haven’t set a target. Um… what?
  4. Underestimating health costs. Here’s a sobering item: A 2018 analysis estimated that a healthy couple in their mid-60s may need to budget between a third and half a million dollars for their health care expenses, including supplementary insurance, copays and other out of pocket expenses. Yet most near-retirees don’t have a clue. According to the IRI survey, more than half of boomers think their health care costs will come to less than 20% of their retirement income, and more than one in four think they will come to less than 10%.
  5. Ignoring long-term care costs. Yet nearly 70% of those in their mid-60s are going to need some kind of long-term care, and the average cost a year is $89,000 a year. Who’s going to pay? “Medicare,” say 46% of baby boomers surveyed. Yes, really. Uh… folks: Medicare doesn’t pay for long-term care. Not a nickel.
  6. Mishandling your retirement date. On the one hand, some people have been forced to postpone retirement because they couldn’t afford it. Some 29% of those aged 62 to 66 have postponed their retirement, and a remarkable 33% of those aged 67 to 72. On the other hand, others overestimate how long they’ll be able to keep working. Some 31% of boomers predict they’ll work past 70… but studies have found fewer than 10% actually do.
  7. Not setting affairs in order. Possibly the most astonishing revelation in the survey is buried in the footnotes: About two-thirds of boomers have taken no steps to protect themselves if they suffer diminished capacity or dementia. They haven’t spelled out their wishes for their care and end of life. They haven’t sorted out a power of attorney for when one is needed. And as anyone who has been through this process can tell you, the chances are pretty high that if you wait to do this stuff until it’s needed, it’s going to be too late.

Just keep in mind that The IRI is a company that represents annuity insurance providers. So the report may suggest certain actions to take leaning towards annuities. But that’s a discussion for another day. It doesn’t make this report any less important.

Right now, at this point in my life and others like me, these seven points have hit home. I’m seeing how we have been misled all our lives that, all will be OK. Well, this report tells you we’re not. I feel we have been short changed. In that we were never given the right tools to make ourselves a comfortable retirement.

This doesn’t mean we are doomed. We can recover and accumulate enough funding for our families for now and the future. How, is the question? There are many ways, from going back to work, full or part time, to starting a side gig at home, or investing in a vehicle that can bring in extra dividends. It depends on your particular situation.

I want to help with this situation, even if in a small way. I would like to share with you the side gig I started with Dean Holland’s Internet Profits. This fit my situation perfectly. I started an online business with a goal to help you create a sustainable income from home. See, it’s perfect. I’m retired and at home. Dean has set up a whole new system to get you up and running within 30 days. I know it’s possible because I did it. That’s all you really need to know. To learn and get more details, there’s a FREE BOOK you can get to answer all the question you may have.

Stay Tuned, And Thanks For Stopping By,

TTYL, Lenny

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