Want some clues about the future of retirement? Just read about General Motors retirees who are about to lose their generous health benefits or listen to President George Bush who warns that Social Security is broke and won't be able to pay future retirees anything close to scheduled benefits. Governments and companies around the world are shifting the retirement risk to individuals.
The troubling news is that neither workers, retirees, nor the financial world are adequately prepared to be more self-reliant. Few Americans realize how long they can expect to live, or how much retirement will cost. Millions of Baby Boomers are financially unprepared as they approach traditional retirement age. A staggering half of households headed by 50-to-59-year-olds have $10,000 or less in their 401k accounts.
A recent Merrill Lynch retirement survey of more than 3,000 Baby Boomers reported that 83% intend to keep working and 56% of them hope to do so in a new profession.
Relying solely on Social Security, Medicare and a company pension for retirement security is risky at best. The smarter, safer approach is to plan for a future wherein retirees work longer, pay more for medical and long-term care and receive lower Social Security and pension payments than previous generations did.
Don't expect to rely on the government or your former employer as you plan for your retirement years. For some Baby Boomer retirement tips, go to: http://home.att.net/~coachthee/Archives/babyboomerstoday.html
Source: BusinessWeek, July 25, 2005