Having Enough Money for Retirement

reitrement ln signAre you worried about having enough for retirement? You aren’t alone; the rich are worried, too. A recent survey shows that half of wealthy Americans consider their retirement planning an area of “high concern.”  An article by Tierney Plumb, published October 27 in the online edition of The Business Journal of Milwaukee, reported on the survey, which was conducted by Merrill Lynch Global Wealth Management.

Each of the 1000 participants had “investable assets” (presumably not including homes and other personal assets) of more than $250,000. This survey described them as affluent; by most other financial industry standards they would be considered financially sound rather than wealthy. Nevertheless, those surveyed weren’t particularly satisfied with their retirement prospects.

Three-fourths (75%) of these financially comfortable people were concerned about rising health care costs. Over half (54%) worried about their ability to leave an inheritance for children or grandchildren, and 58% feared the economy would interfere with their ability to meet their financial goals. More than a third (37%) believed they would need to postpone their retirement.

If your own income and savings levels don’t even come close to putting you in the “affluent” class, you probably don’t see many similarities between your own retirement concerns and those of the participants in this survey. Yet the survey results illustrate an important point to consider for anyone planning for retirement. That is your own personal definition of “enough money.”

True, for some of those approaching retirement age, the idea of “not having enough” might mean worrying about being able to pay the bills. Others, like the relatively affluent Americans in this survey, are quite unlikely to end up spending their golden years living in two-room apartments and eating Ramen noodles. They can presumably count on having enough to provide adequately and even comfortably for their basic needs.

So why are they concerned? Because retirement is about far more than basicHappyRetirement needs. Ideally, having enough for retirement means being able to live where and how you want to live, to enjoy long-deferred hobbies, to fulfill dreams such as traveling, to feel secure that you will have the care you may need in old age, and to carry out estate planning that leaves legacies to family members or charitable causes.

If you are worried about being able to enjoy your own retirement, one way to begin easing those concerns is to think consciously and deliberately about what you want retirement to look like. How will you want to spend your time? How and where do you want to live? Realistically, what do you expect your health to be like? Do you look forward to being free to travel, spending time with family, being more involved in your community, or volunteering? What are your retirement dreams?

Think through what you want in retirement, and discuss these goals with your spouse and other family members. Then, together, you can start to evaluate what you might need to do in order to reach your goals. Be creative; don’t reject any possibilities until you have evaluated them thoroughly. You might consider options such as downsizing your home now instead of later, finding ways to increase your saving for retirement, planning to work part-time after you retire, and sharing housing with friends or family members.

question mark with dollarsWhatever possibilities you consider, keep three important elements in mind: One, take care of your health, because it’s your single most important retirement resource. Second, be as realistic about your circumstances as you can. And finally, remember to ask the right question. You can’t know “How much money is enough for retirement?” until you answer the deeper question: “Enough for what?”

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4 Responses to Having Enough Money for Retirement

  1. Pro2ProNetwork November 16, 2009 at 8:12 am #

    I agree with your article…great advice. I think as people try to save for their retirement it is best to ask yourself what is enough? From there, you can figure out ways to save and start cutting back sooner than later or working out a savings plan now.

  2. richard trachtman November 18, 2009 at 7:44 am #

    Good advice. I would add that there are, for most people, two stages of retirement: the early retirement years when many people are still healthy and vigorous enough to be active (and desire enough income to trave or do other things) and the later stage when old age and, perhaps, illness are likly to limit independence and require money for the help necessary to remain independent or even the cost of nursing homes or rehab centers. People should ask themselves who will take care of them in this later stage. Will they be able to afford to move into an assisted living community or hire aids to do things like shopping, bathings etc? Long term care insurance is another important consideration, especially if one has a spouse for whom protection of assetts is important. When one considers these possibilites the question of “What is enough” takes on added meaning and meerly being “fiancially sound” or even “affluent” in the present may not be enough to meet future needs.

  3. Rick Kahler November 18, 2009 at 7:49 am #

    Richard, your comments are spot on, as usual! Health care costs are often left unaddressed in most financial plans….and, with the current upheaval going on in Congress over the health care industry, it’s difficult to forecast today what health care will look like, or cost, in the future. However, we play with uncertainty at every stage of the planning process….we’ve been doing the same guessing game with the estate tax credit.

  4. Myrna Minalga November 21, 2012 at 2:32 am #

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