Americans Must Accept New Retirement Norm

It’s time to change our traditional beliefs about retirement, according to Business Week’s “The Great Retirement Rethink” by Elizabeth Ody.  While it’s really not what anyone wants to hear, basically we need work longer and even lower some of our expectations about retirement.  After averaging a gain of close to 10% each year from 1926 to 2000, the S & P 500 has lost around .4% annually since 2000.  Those who purchase some of the best immediate annuities may worry less than others, but only 23% of those surveyed are confident that they’ll be able to cover their most basic living expenses in retirement.  That is a very sad fact.

Extending your working lifetime is one of the best ways to secure a better retirement.  You are making money to add to your retirement savings, you aren’t taking money out of that savings, the market may make gains, and your savings will not have to be used for as long of a time.  Whether you stop working or not, try to delay Social Security payments as long as you can as well because payments increase the longer you delay.  Although drawing down 4% of your retirement assets each year has been the norm, many experts suggest that it’s best to lower that number to 3%.  Annuities are another way to help guarantee a secure retirement.  You’ll want to do an annuity rates comparison because your returns are based on current low interest rates.  Even though the economic conditions warrant some financial changes that are less than ideal, delaying retirement five years can make a huge difference in your savings.

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