Thursday, January 11, 2007

Retirement Reality Check

As extended life expectancies change the rules of retirement, those in their 50s and 60s must “get real” about their financial futures, whether they intend to work or not. The question remains, “Will my nest egg last throughout my retirement years?” As most experts estimate that retirees typically need at least 70%-80% of their pre-retirement income for a secure retirement, statistics show that retiring Americans could use a financial reality check:
* Forty-four percent of Americans age 55 and older have saved less than $100,000, according to a Retirement Confidence Survey by the Employee Benefit Research Institute (EBRI).
* Only 13% of these Americans have saved $250,000 or more; a discouraging 30% either didn’t know or refused to answer the question.
* While previous generations depended on pensions, only about 20% of workers have traditional pensions, and that number is decreasing.
* Health is unpredictable and medical expenses are not always covered by health insurance. An estimated 73% of older persons do not have sufficient income and assets to be able to withstand a long-term illness or disabling condition totaling $150,000 over three years.
* To top it off, the U.S. Department of Labor reports that the average American spends 18 years in retirement.
Source: Edward T. Hempstead, ( is managing partner with The Hempstead Group of the Northwestern Mutual Financial Network, the marketing name for the sales and distribution arm of The Northwestern Mutual Life Insurance Company (NM), Milwaukee, Wisconsin, its affiliates and subsidiaries. Hempstead is an insurance agent of NM based in Clayton, Mo. This article is for educational and informational purposes only. It is not intended to be used for tax or legal advice.