Posts Tagged ‘MaxPro’
Risks Threatening Current – or Future – Retirees
Assuming you’re one of the Baby Boomer Generation, you’re likely pondering stopping work – provided that you haven’t already started your retirement. And if you have previously left the 9-5 rat race, you may be wondering when you’re financially able to continue to be retired.
Today’s financial crisis complicates the situation substantially by increasing some significant retirement related risk factors:
1. Average Life Expectancy Has Grown
Current life expectancies are longer than their parents. For example, in 1970, a 60-year old Caucasian male would have had a life expectancy of only 16.2 years; but, by 2008, his life expectancy had climbed to 20 additional years.
So how is the Boomer going be able to afford to pay for those additional 3.8 years? There are only a few realistic responses:
> Accelerate current savings
> Continue to work longer
> Live with with children
> Get by with a reduced quality of life
2. Health Care Costs Keep Rising
Adequately funding one’s medical care programs are some of the most difficult financial activities, largely because health care needs are so individualistic, with requirements varying greatly from one person to another. Long-term care requirements are even harder to predict and arrange adequate funding.
Medical expenses have grown more than 5% (inflation adjusted) for the past 15 years – and that is greater than the growth in family income. Medicare costs are expected to rise at similar rates.
3. Government Actions May Impact Retirement Benefits & Supplemental Programs
It is well known that the expenses of major entitlement programs (e.g., Social Security, Medicare, and Medicaid) are growing faster than other parts of the economy, and some economists challenge the long-term feasibility of these programs because of the cumulative effects of increased longevity, size of the Boomer population, and increasing health care expenses in general.
Moreover, immediate questions concerning ongoing health insurance during retirement, and at what financial levels, are wide-spread in today’s economy – and these questions are further fueled by auto industry, and other, corporate reorganizations.
We are still witnessing a lot of conversation concerning a national health care program – but such debates have been active for decades, with few benefits to show for those efforts. Although President Obama will be leading such efforts this year, most people anticipate Congress to present a lot of opposition.
Many believe that people past age 55 will be protected from reductions in these social programs, but maintaining full coverage for them is a two-edged sword – doing so increases the probability of a new value-added tax, which would ultimately add to the tax burden for retirees.
4. Sometimes One’s Retirement Date is Dictated, and not Totally Up to the Individual
According to a 2004 Health and Retirement Survey (HRS), 37% are forced to retire. This can occur due to poor health or recessions, etc.
5. 401Ks Became 201Ks
Were your savings (including your 401k) devastated with the stock market crash last year? My investments were deeply affected. Many people saw their 401k and other stock market accounts take a 50% hit, which has led many comedians to rename them “201k”. For many people, their 401k was the bulk of their retirement savings, so this stock market crash seiously damaged their retirement plans.
Humpty Dumpty Was No Financial Planner
Not all the news is bad. Luckily, you can repair a broken “Nest Egg”.
You can work longer, semi-retire and take a part-time job, work from home, start your own business, etc.
If you’d like to start an online business, but are hesitant because you’re not an internet expert, one superb starting point for picking up all the knowledge about internet marketing that you will need to be successful is to join the Online Success for Beginners classes.
A study by Butrica, Smith and Steuerle (2006) noted that working just one (1) extra year can improve annual retirement income by 9%, while working a total of five (5) extra years results in an extra 56% annual retirement income.
If you’d like to find out how to generate a second income, so that you can have a comfortable, financially secure retirement, check out Darren Salkeld’s new MaxPro Marketing System and get his FREE Report and FREE Audio describing the age-old secrets of creating wealth.