Delano Herald Journal

Serving the communities of Delano, Loretto, Montrose, MN, and the surrounding area

Brian Wolf Column – 02/02/15



In America, we have tens-of-millions of people who are living in retirement right now, with millions more joining them in the coming years, as all the baby-boomers roll into retirement.

Many of these retirees are very concerned with where their income will come from, and whether they will have enough income for their entire lifetimes.

A 2010 study by the Employee Benefit Research Institute (EBRI), titled “What Are the Prospects You Will Run Short of Money in Retirement?” found that 64 percent of Americans in the lowest income levels will run out of money in retirement in only 10 years.

This study also found that after 20 years of retirement, 29 percent of people in the next highest income bracket will run out of money.

Perhaps the most shocking finding of the EBRI study is that after 20 years of retirement, 13 percent of people in the highest income bracket will be out of money.

By “running short of money,” the study is referring to the large percentages of retirees who will run out of money to pay basic living expenses and uninsured medical expenses.

This will not be a temporary problem, but rather a problem for the rest of their lives.

A study done by the EBRI entitled “Retirement Savings Shortfalls for Today’s Workers,” released in October 2010, calculated the total dollar amount of the shortfall.

This figure, in today’s dollars is well over $4.5 trillion. A study by Ernst and Young, June, 2009 titled, “Investing Your Lump Sum at Retirement,” came to the same conclusions.

It found that almost three out of five new middle-class retirees will outlive their financial assets if they attempt to maintain their pre-retirement standard of living.

As you can probably imagine, nobody wants to “adjust” their standard of living down just because they are in retirement years; actually, that’s precisely when I want to increase my standard of living!

The study revealed that “middle-income Americans entering retirement now will have to reduce their standard of living by an average of 24 percent to minimize the likelihood of outliving their financial assets.

Those Americans seven years out from retirement are even less prepared.” The study estimates that they will have to reduce their standard of living by an average of 37 percent.

Now, I realize that when we talk about “other people” or “big numbers,” lots of people kind of zone out, so let me bring it back to a personal level.

Do you know for a fact that you will have enough money, no matter what life throws at you? What about a market crash, health issues, accidents, lawsuits, divorces, deaths in your family, etc?

If you aren’t sure, then you need to meet with a qualified advisor to make sure you have the right plan in place so you can be reasonably sure that you will have a financially secure retirement.

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