The future of retirement for many American’s doesn’t look so good. In fact, more than half of Americans don't have enough retirement savings. Many adults are uncertain about the future due to depleting savings accounts, rising cost of living, and the financial strain on Social Security. Not to mention talks of a looming recession and complicated world affairs.
While we can only speculate about the future, it’s important to think about what retirement could look like in a few years. Let's explore the future of retirement for aging Americans.
Retirement Trends
More Women in the Workplace
Compared to past generations, there are more women in the workforce today. 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 threatens the financial future of individuals who have planned on this money for their retirement. We may even see significant changes to the Social Security program to address this issue.
Increase in Senior Population
As the number of retirees increases, there is more strain on Social Security and fewer individuals in the workforce. Eventually, this will lead to an imbalance between the number of people working and the number of retirees. With fewer people in the workforce, there will be fewer people to support the beneficiaries of Social Security.
Working Longer
More Americans are working well past their retirement eligibility, whether it's to continue earning money of for personal fulfillment. According to AARP, “adults age 65 and over are twice as likely to be working today compared with 1985.” The future is likely to 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. Even larger companies may not offer enough to support families through the rising cost of living. If your company does offer a retirement package, take advantage of it!
Longer Life Expectancy
As technology and healthcare improves, so does our life expectancy. While this is great news, it also comes with a financial caveat. Individuals must be able to support themselves financially for a longer period of time. This means that you might need more money to retire than you might have planned on.
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.
Start Saving
While saving money might seem obvious, many Americans aren’t doing it! Start saving your money now and placing it into a 401K plan, IRA, or separate savings account. Take advantage of employers matching 401k contributions or employer-sponsored retirement plans.
You may even want to create a budget and set monthly goals to help track your progress and stay accountable. Whatever you save now for retirement will help you out later.
Plan Your Needs
Start planning for retirement by calculating how much monty you will need to maintain your standard of living after you retire. This cost should include living expenses like rent or mortgage, food costs, transportation costs, etc. You should also think about potential medical costs since seniors are at higher risk of illness and health complications.
As needed, work with a certified financial planner to understand your personal finances and feel financially secure. By knowing how much you need for retirement, you can set reasonable goals to help you get there.
Pay Off Debt
In addition to saving money, you should also focus on paying off debt. This could include mortgage, car payments, credit card debt, student loans, and other expenses. By paying off this debt now, you will have more money available to use during retirement.
Educate Yourself
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. These resources can help you secure your financial future.
Invest in Insurance Policies
Protect you and your loved ones from potential risks by looking into insurance policies. At a minimum, we suggest that everyone has a life insurance policy. However, 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. Look for alternative forms of income to help supplement your savings or Social Security benefits. For example, renting properties can provide passive income or working a part-time job brings in additional funds. You could also diversify your investment portfolio.
An option you may not have through about is opening your own small business, like a Caring Senior Service franchise. As the owner, you earn money and can hire staff members to manage the day-to-day operations. This option gives you the flexibility of retirement along with financial security. 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 we can address any questions or concerns you may have about the process.
