Winging It in Retirement?

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Saving should be the centerpiece of any retirement plan today.  But a new survey indicates that many Americans on the cusp of retiring have given little thought to the other key issues they’ll face in retirement.

A majority of older Americans recently surveyed by the American College of Financial Services, an educational organization for financial professionals, said they have set a goal for how much money to save to “live comfortably” as retirees.  And, when asked to assess their own progress, they feel they’re doing a good job of it.  Granted, the survey was limited to a select group of about 1,000 people over age 60, all of whom have at least $100,000 in investable assets.

But the financial risks posed by the transition away from full-time work and a regular paycheck are complex and continual – and preparing for them goes well beyond contributing to a 401(k).

Only a minority of people planning their retirement take into account these important financial issues:

  • tax considerations (29 percent of older Americans have considered this factor, according to the survey);
  • risks that could “undermine” their retirement (29 percent);
  • the financial consequences if their spouse dies (34 percent);
  • how they’ll deal with changing health and long-term care issues raised by aging (37 percent);
  • what their household budget will look like (39 percent);
  • the best way to withdraw income from their investments (39 percent);
  • how much income their investments will produce over time (40 percent).

The results dovetail with numerous other studies also warning that Americans of all ages are poorly prepared for retirement.  One analysis, by the Center for Retirement Research, which supports this blog, shows that 52 percent of all U.S. households are at risk of not having enough retirement income to maintain their pre-retirement living standards.

Retirement – it’s too important to be winging it.


I am facing the consequences of lack of preparation now. After scrimping and saving her whole life, my mom got carried away in retirement by having a pension, an inheritance, and a small 457. A motor home, two home renovations, and a new car have eaten up all the savings. She’s run out of money that would now be very useful for her day-to-day living. Lack of planning in retirement results in very uncomfortable requests to children for money.

Paul Brustowicz (@PaulBrustowicz)

I am comfortable in retirement, but my consideration of taxes was wrong. I was in a lower tax bracket when I had a mortgage and high property taxes. Now all I have is the standard deduction and pay taxes on pension, MRD, SS and annuity income.

I am NOT complaining, happy to have the income and no debt. LTCI and adequate life insurance are in place. Caveat: My career was financial services.

Kim Blanton

Dear Daniel and Paul –
Thank you so much for being willing to share your personal experiences with retirement. I’m sure there are many readers who will learn from /relate to these issues.
Sincerely, Kim (blog writer)

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