Will procrastination torpedo your retirement? This was the headline of a recent Money-Watch column that I read.
Two critical questions were asked for those over age 55: Do you know how you’ll use your retirement savings when you retire?
Do you have a specific strategy for using your savings to generate retirement income?
The results came from a survey conducted by LIMRA Secure Retirement Institute (SRI) and didn’t surprise me a bit. You wouldn’t be alone if you answered no to either or both of these questions. One out of four older workers answered no to the first question, and three out of four answered no to the second.
It’s been my experience that the majority of older workers within 10 years of retirement haven’t worked on an income plan to make sure that they will have enough money to last the rest of their lives.
The column goes on to say that the number-one reason older workers don’t have a plan is procrastination; imagine that.
Forty-two percent of older workers simply haven’t gotten around to it, and nearly a quarter of older workers said they were not close enough to retirement to create one. If you’re going to retire within 10 years, it definitely is the time to plan; retirement planning isn’t meant to be done at the last minute. Remember, the time to dig a well is before you are thirsty.
Another finding of the study was that women were much more likely to not plan, which is kind of odd because they are the ones that typically will live the longest.
According to the column, given the fact that there is decline in traditional pension plans that pay you a lifetime monthly retirement income, learning how to generate retirement income from your 401(k) or other retirement accounts is one of the most critical retirement planning tasks facing older workers today.
I couldn’t agree more. Most people want to focus on how much money they will have, as opposed to thinking about how much money they will actually need. It really is a different kind of planning process; how to accumulate, versus how to make sure whatever you have actually lasts.
The LIMRA SRI study is yet more evidence that many of our retirement planning challenges are behavioral in nature.
Some things in life you can outsource to others, and some things you just have to do for yourself.
Here is a list of some things that you should definitely do for yourself; brush your teeth, kiss your spouse, praise your kids, live your dreams, and keep the faith. Here are some things that you definitely want to have help with; knee surgery, root canal work and, of course, income planning for life.
Give us a call if you want to learn more about how to maximize your retirement income, and how to make sure your retirement income won’t run out before you do.