Retirement funding can seem like
something to deal with later in life, but setting a strategy in place in your
early working years is the key to a comfortable life in retirement. Find out
how we can help you determine the strategy that’s best for you!
Seven years ago the United States
plunged into a financial situation later dubbed the Great Recession. Stocks
plummeted, home prices dropped, and unemployment skyrocketed. The comparisons
to the Great Depression of the pre-World War II era came about quickly, but the
generations that lived and worked through that recession had a positive
attitude about the outcome.
Flash forward to today. The country
is bracing itself for a shift in the workforce as the Baby Boomer generation
makes its move into retirement. This shift makes way for the
highly-anticipated, even larger generation of the Millennials.
In 2015, the Millennials, who are between the ages of 18 and 34, became the largest share of the American workforce. Raised by the Baby Boomers and old enough to remember the impact of the recession, this generation has an interesting set of beliefs that steer the idea of retirement in a new direction. See below for a list of considerations Millennials take into account regarding retirement and how the Great Recession of 2008 is affecting their retirement funding.
1. People aren’t retiring as early as they
Baby Boomers have had to deal with job losses, falling home prices, and investment portfolio losses, so retirement has been delayed for many Boomers. Of those over 50, 44 percent plan to work part-time in retirement and 33 percent plan to delay retirement. Implementing a retirement strategy early can ensure you’re prepared to retire at an age you choose.
2. You can’t rely on Social Security.
The Social Security Administration’s Trustees Report of 2015 states that total expenditures have exceeded non-interest income of its trust funds since 2010, and they anticipate that the cash-flow deficit will continue. Depending on Social Security as retirement income is no longer a wise plan. It’s going to be up to individuals to ensure they have planned for their future financial needs.
Earn more for retirement with an indexed product.
3. Selling your home isn’t a good way to get money
Many areas of the U.S. continue to reflect home prices that have not recovered from the recent depression. The continually rising home values that retirees counted on in the past are no longer guaranteed. Retirement funding should consider this reality.
4. Living a healthy lifestyle can offset future
In a recent survey, respondents said they consider healthy lifestyle habits such as a proper diet, regular exercise, and preventive care as a means to reduce healthcare costs. Healthcare expenses can be a major factor in retirement funding.
5. Realize that you will have to withdraw money
from retirement accounts and savings accounts longer than you anticipated.
Life expectancy has increased from 75.4 years in 1990 to 78.8 in 2013, so an increase in retirement savings will be necessary. Cutting back on non-necessities is one way to deal with needing additional savings, but healthcare expenses and other necessary costs aren’t easily reduced. With Social Security payouts in doubt for Millennials, it’s critical to start saving for retirement now.
6. It’s vital to take an active role in managing
your own financial accounts and there are services to help.
Don’t raise your hands in surrender to understanding financial decisions! We are here to help. Our Farm Bureau Financial Service agents know the ins and outs of which strategies will work for you.
If you want to plan for your future, but you aren’t sure where to start, connect with a Farm Bureau agent in your area to discuss your future financial opportunities. Protect your family by finding the best retirement strategy for you!