Retirement Issues And Solutions

Retirement is the point where a person stops employment completely. To support living during retirement, a retiree needs to accumulate enough assets. This could comprise of cash, savings or other class of assets. Not enough cash inflow during retirement is the single most important challenge that retirees face today.

The rule of thumb is that you'll need 70% to 80% of your pre-retirement income to maintain the standard of living you had when you were working. But many are not even achieving this.

And even though you might satisfy the rule, increase in medical expenses due to old age and that occasional spending splurges that you're likely to take from time to time, like say going on that dream holiday vacation that you've been longing to go or even going to that fancy restaurant will all take out a big portion of your retirement savings - which can cause you a bit of problem later on.

Also, people are living longer now. Life expectancy at birth in the United States in 1900 was 47 years and at the end of the century, it was 77 years. And a 65-year-old American man today has a life expectancy of 16.4-years, about 50/50 chance of living to 85 and a 25% chance of still being around at 91. That means Americans will now live another 15-30 years after quitting work. Chances are many will outlive their money before they outlive their years.

The answer to the problems is for you to be prepared. Have a plan. Nobody in his right mind plans to fail. But when you fail to plan, that is precisely what you'll get. Plan for your retirement years to suit your retirement objectives. And start early. Starting early will give you a longer period to achieve your required retirement objectives - which may translate into a more affordable and less excruciating saving plan.

With proper planning you'll arrive at your destination with confidence and secure - not anxious.

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