Do you remember pensions? If you don’t, it’s probably because you never had one.
A long-long time ago, in a land far-far away, retirement was on auto-pilot and employees had a pension plan (and possibly a gold watch) waiting for them at the end of a long career. US-based professionals employed in the private sector and under 50 years old must wonder how this fairytale land ever even existed.
But let’s put pensions aside, for a moment. According to the Federal Reserve,
25% of non-retired people don’t even have retirement savings of any shape or form. 13% of people age 60 and older that haven’t yet retired have no retirement savings.
Hispanics are the least prepared of all, among non-retirees. Unfortunately, for people in that cohort, retirement might look very different from a fairytale ending unless there are more catalysts for educational & economic change within their communities and households.
The changing global retirement landscape is one of the reasons why many of us struggle with retirement savings and planning. As pension (defined benefit) plans continue to be phased-out and replaced by employer-sponsored ((i.e. 401k, 403b, and SEP) or “voluntary” retirement accounts (i.e. IRA, Roth IRA, etc.) global employees are being forced to adjust their savings strategies and educate themselves. The process can be confusing and exhausting. Those that don’t manage to adapt or save enough early in their careers might have no choice but to live on a lot less in retirement. Making matters worse, far too many employees fail (or refuse) to accept the fact that their country’s social security program was never designed to be their main source of income in retirement.
I’d describe the global retirement challenge as colossal, for young & old, alike. Yes, colossal, because the forces of inflation and technology are relentless and they simply do not discriminate based on race, social status, sexual orientation or creed. Sure, better healthcare and improved standards of living are a blessing for many of us in the 21st century. But they also come with longevity – a risk that’s grossly underestimated by many, even mature professionals.
The Fed’s data shows that people of all ages -- not only those close to retirement -- feel inadequately prepared to invest on their own, much less retire. A retirement “fairytale ending” is not easy for anyone to achieve. But for all their support and social responsibility, we shouldn’t expect our governments, our employers, or even our loved ones to serve it on a silver platter to us. A great retirement plan is definitely possible, but it’s ours to build! That’s why one can never be too young, too smart, or not wealthy enough to start thinking about it and partner with someone you trust to build it with you.
Who’s helping you plan for your future?