What You Need to Know
- People who are retired will probably have something they want to do.
- If they want to retire by starting a bait shop, they need to fund that.
- If they may have debt when they retire, they need to think about that.
American retirement outcomes need improvement. Having $100,000 saved in a 401k is not going to cut it. As we read daily, for the majority of people household retirement savings and projected incomes are at levels that will not sustain basic lifestyles when full-time work ends.
We are headed for a crisis for the many households who plan to primarily rely on Social Security benefits for the bulk of their non-working years’ incomes. As this situation unfolds, it will put substantial pressure on government to increase benefits for these households. This will add another initiative to increase stress on the federal budget.
At the same time, the medical community suggests that individuals get routine screenings for many diseases at certain ages. The goal of these screenings is to identify medical problems early, avoid costly medical treatments and prevent unnecessary deaths. The same practice needs to be adopted for retirement readiness.
I propose that an initiative be implemented to promote regular retirement readiness checkups beginning at the latest age 45. In reality, I think as soon as individuals begin full-time work, planning for their later years should begin.
A Retirement Readiness Checkup Proposal
Here are some example areas that a retirement readiness checkup could cover:
• Finding purpose. What will people look to do or what causes do they wish to embrace once “every day is a weekend”? Having people think about what retirement looks like for them as early as possible should help build awareness of the costs needed to fund the desired future lifestyle.
• Lifestyle expenses. What level of spending should be planned, including needed support for dependents or special needs children or grandchildren?
• Health care needs. With post age 65 medical costs estimated at roughly $300,000 for a twenty-year retirement for two people, how these costs will be funded using a combination of insurance, federal programs and personal savings needs to be planned.
• Social Security. Determining what amount of benefits to expect when work ends.
• Business needs. With more and more individuals developing entrepreneurial business initiatives how should these businesses be planned for as they age? What is the desired end game for the business?