The future of retirement for many American’s doesn’t look so good. In fact, almost half of American families don’t have retirement savings. With depleting savings accounts, rising cost of living, and the financial strain on Social Security, many adults are uncertain about their financial future.
While we can only speculate about the future, it’s important to think about what retirement could look like in a few years or even decades. In this post, we will explore the future of retirement for aging Americans and offer some tips on preparing for retirement to help you feel better about the future.
There are several trends that could indicate what retirement will look like years from now. Let’s explore just a few.
More Women in the Workplace
The future of retirement in America doesn’t have to be grim! Compared to past generations, there are more women in the workforce today, and that number is expected to continue growing. As women work, they increase their lifetime earnings, which can, in turn, improve Social Security benefits and retirement plan savings rates. This trend indicates that the future may bring more equal retirement savings between men and women.
Social Security Shortcomings
Social Security faces financial issues that could result in Americans not getting their full benefits. This poses a large threat to the financial future of individuals who have planned on this money for their retirement. In the next few years, we may see huge changes to the Social Security program to address this issue, but as it stands now, the program
Increase in Senior Population
As you know, the senior population is booming. As the number of seniors and retirees increases, the more strain is put on Social Security and the fewer individuals there are in the workforce. There will be an imbalance between the number of people working and the number of retirees. With fewer people in the workforce, there are fewer people to provide the necessary labor to support the beneficiaries of Social Security.
Whether it’s to continue earning money or for personal fulfillment, more Americans are working well past their retirement eligibility. According to AARP, “adults age 65 and over are twice as likely to be working today compared with 1985.” The future may see an increase in the average age for retirement in the US.
Lack of a Retirement Plan
Many employers don’t or can’t offer any type of retirement plan. Small companies typically don’t have the resources to sponsor a retirement program. Although larger companies may have the resources, they may offer enough to support families through the rising cost of living. If your company does offer a retirement package, take advantage of it!
What You Can Do To Prepare
While the future of retirement may be uncertain, there are many things you can do to start securing your finances. Here are just a few ideas to get you on the right path.
While this tip might seem obvious, many Americans aren’t doing it! Start saving your money now and placing it into a 401K, IRA, or even a separate savings account. Ask your employer what they offer when it comes to retirement. If they match 401K contributions, take advantage of it! Whatever you save now will help you out later. You may even want to create a budget or set monthly goals to help track your progress and to stay accountable.
Plan Your Needs
Another way to prepare now for retirement is to start calculating the amount of money you will need to maintain your standard of living after you retire. This cost will include rent or mortgage, food costs, transportation costs, etc. You will also need to think about potential medical costs since seniors are at a higher risk. By knowing how much money you will need each month to live comfortably during retirement, you can have a better idea of what your savings goals should be.
Pay Off Debt
In addition to saving money, you should also focus on paying off any debts that you have, like mortgage, car payments, credit cards, and other expenses. By paying off this debt now, you will have more money available to use during retirement. You should also look to eliminate extra fees and charges.
Another great tip is to educate yourself on financial planning. This could involve doing research online, taking classes, or even meeting with a financial advisor. There are a number of resources available to you that can help you be smart with your money and secure your financial future.
Protect you and your lived ones from potential risks by looking into insurance policies. You and loved ones should consider getting life insurance policies. You may also want to get long-term health insurance to help curb costs if you need additional assistance as you age. While you might not need that financial assistance now, it’s best to be safe in case something happens.
Consider Additional Sources of Revenue
Just because you retire doesn’t mean you have to stop earning money. You can look for alternative forms of income to help supplement your savings or Social Security benefits. For example, rental properties provide passive income. You may also want to continue a part-time job.
You could also consider diversifying your assets, like stocks. An option you may not have through about is opening your own business, like a Caring Senior Service franchise. As the owner, you will earn money but you can hire staff members to manage the day-to-day operations of the business so you maintain the flexibility of retirement. You may also consider building your business as an asset that you can sell when retirement comes around.
To learn more about how to utilize a franchise business to help secure your future retirement, reach out to us! We would love to discuss the benefits of becoming a franchise owner and would be happy to address any questions or concerns you may have about the process.