Even most upper-income households worry about retirement income

Sunday, January 13, 2008

Even most upper-income households worry about retirement income

Not having enough money for retirement is the number one financial worry of Americans. This is according to Gallup's annual Personal Finance poll, updated in April 2007, in which Americans were asked to rate the amount of concern they have about each of several financial problems. The baby boomer generation is retiring and facing up to the fact that not only have they not saved enough, they are living longer, getting less support from the state than ever and inflation is eating into their savings. Of the eight specific items rated in this year's poll, "not having enough money for retirement" generates the most concern, writes Lydia Saad of Gallup News Service. âEven a majority of Americans in upper-income households say they are "very" or "moderately" worried about their retirement income.â These remarks by President Bush at the 2002 National Summit on Retirement Savingsâ¨Capital Hilton Hotelâ¨Washington, D.C., are very interesting. âJust over a hundred years ago, at the turn of the last century, the average life expectancy in America was only 47 years. Today, that number has increased by three full decades. This amazing advance in the health of Americans is also profoundly changing our society. Americans who retire today may have decades of healthy life before them. This is time to volunteer, making seniors one of the greatest resources of compassion in America. This is time for family to pass on values to grandchildren and to strengthen the bonds between grandparents and family members. And, increasingly, retirement is a time of new beginnings: a time to travel and explore; a time to take up new hobbies; and a time to take up new careers. Some 80 percent of baby boomers -- I happen to be one -- say they plan to work at least part-time in retirement. And smart employers will be wise to use their experience, and their competence. The choices seniors make in retirement should not be limited by arbitrary dates, or obsolete stereotypes. Increasingly, the choices of seniors will only be limited by two things: the state of their health, and the state of their savings. Because the nature of retirement is changing, the needs of retirement are changing as well. Older Americans now require a retirement nest egg large enough for decades of enjoyment and ambition. As medicine increases the length of life, adequate savings must increase the options we have on longer lives. Saving is never easy; it's hard for some to do. But it's always worthwhile. Particularly when you think about the power of compounding interest. The power of compound interest is one of the great advantages of American citizens. And they must learn to use it. If a worker starts saving just $20 a week at age 22, and earns a 5.5 percent real interest rate on the investment, that adds up to a nest egg of nearly $180,000 by age 65. This summit was created by Congress to educate workers and citizens about the power and rewards of saving, and I want to thank you for participating. You've accomplished a great deal, but there's much more to do. Americans are saving too little -- often, dangerously too little. The average 50-year-old in America has less than $40,000 in personal financial wealth. The average American retires with only enough savings to provide 60 percent of his former annual income. This problem is especially acute for women and minorities.â Retirement is the time to enjoy the rest of your life. I believe you can only do this if your income is consistent and reliable, grows to meet cost of living increases and, is not diminished by taxation losses. I believe you will also want to protect your capital so it is available for your own use or the future use of your beneficiaries. Looking forward to a more relaxed lifestyleâ¦never having to get up for work againâ¦having the time to do the things youâve put off for yearsâ¦travelâ¦seeing more of friends and family â" retirement is a time when you should be able to relax and enjoy the rewards of your working life. If youâre thinking about your retirement, whether complete or partial, one of the most important things to consider is how you are going to fund your lifestyle. If you are nearing retirement, itâs worth taking a few minutes to ask yourself the following questions. These are some of the issues you should discuss with your financial planner. â¢ Do you have sufficient funds in superannuation to last your lifetime? â¢ Will you be able to comfortably fund your retirement lifestyle? â¢ Are you aware of and in control of your current living expenses? â¢ Do you know when you can retire and have enough money to fund your retirement years? â¢ Are you aware of the investment options within superannuation that can affect your finances? â¢ Do you know which retirement income stream is more appropriate for you? Is it allocated pensions, a complying pension or some other type? As retirement draws closer you must consider maximising your savings and superannuation as a priority. Some of the important strategies to consider before you retire are: Eliminating non tax deductible debtâ¨The interest you pay on debts such as your home mortgage and credit cards can significantly reduce your capacity to create wealth. Reducing debt is a very important aspect of building a strong financial future. Maximising opportunities outside superannuationâ¨Strategies that you could use apart from superannuation include: lump sum investing, regular investing (savings plan), internet marketing and gearing. Investments could include shares, property and cash reserves. Maximising your superannuationâ¨Depending on your circumstances and requirements, your financial planner may suggest a financial strategy that uses superannuation as a tax efficient investment vehicle to enter the investment markets. Some of the important considerations for such a strategy are: â¢ Your objective should be to fund retirement in a tax effective manner â¢ Contributions to your superannuation cannot exceed your age-based maximum deductible limit (set by government regulation each financial year) â¢ Super funds generally donât allow access to capital, until you meet age requirements and retire from workforce. Income streams in retirementâ¨Income streams, which you can use to fund your retirement, can be broadly categorised into: Traditional income streams (superannuation based) â¢ Non-superannuation investments: â¢ Interest on deposits â¢ Dividends from shares â¢ Rental income from property â¢ Revenue from E-commerce eMarketing: E-commerce has redefined the marketplace. E-commerce is the sale of products and services over the Internet. It is the fastest growing segment of our economy. It allows even the smallest business to reach a global audience 24/7 with its product or message with low cost. Currently, there are more than 300 million people using the Internet internationally. Sixty-nine percent of the online population has made at least one purchase in the last 90 days. 2004 online sales were $3.2 trillion. The Internet user average household income is $59,000, making this a very attractive demographic for your business to target. Starting a business on the World Wide Web is now a much simpler proposition. There are now many good opportunities available. For example, EDCGold.com is an opportunity with internet friendly products and delivery method, 4+ hours per week of online training and specialised emarketing tools and services from partner InTouchMediaGroup, a recognised Google specialist. However, you must establish your business plan, your goals in terms of revenues, the time available and of course carry out your due diligence about the program before going ahead. I believe that a growing portion of Americans will earn an ever increasing portion of their revenues from a ecommerce. A quality retirement as well as a comfortable lifestyle will both benefit from an early establishment of the internet marketing business in their lifetime. The internet has now reached the Web 2.0 stage. Consumers can now comprehend all of the unique advantages that the World Wide Web has to offer. Businesses are now following the lead in order to survive. I have recently established this business oriented blog to track and comment on new internet developments and how to take advantage of them. Put www.cashsuccessnews.com in your favorites section in your browser. Iâll attempt to always keep you informed as to the latest and greatest breakthroughs concerning Retirement, lifestyle and internet marketing. Rosaire Bachand

I retired from corporate life in 2002 after a 10 years Air Force military stint and a 35 years Information Technology careers. I now focus on my home based "online business" generating Multiple Streams of Income. This contributes heavily to maintaining my Lifestyle. I am always willing to help others in duplicating my activities.

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