RETIREMENT: An Issue To Be Faced Now
One of the last things on the mind of small business owners is preparing for retirement. Let me share a few sobering statistics:
- A mere 28% of non-retired Americans have made an effort to determine their likely monthly income need for retirement (survey by Alliance).
- A healthy 65 year-old couple retiring in 2019 is projected to spend $369,000 in today’s dollars ($551,000 in future dollars). Expenses at age 85 are estimated to be 250% higher than at age 65.
- Today 63% of Americans are unprotected for retirement, meaning they have no guaranteed source of protected life time income.
This past week I have been working on budgets with several small business clients, neither of which had savings for retirement as a budget item. When asked why not, several answers were put forth:
- I can’t afford that at this time.
- I will address that issue later.
- Let me share a few other sobering statistics:
- One in six seniors is working past 65.
- The workforce over the age of 75 nearly doubled over the past 20 years.
While I agree that working past the age of 65 offers many benefits, i.e. keeps one active both physical and mentally, the reason to be working should not be because you can’t afford to stop.
It’s not too late to start saving for retirement at any age. The first step is to find out how much you will need (see a CFP planner). Once that figure is determined, you can start savings toward that new goal.
Yes, it may scare you but a start at savings in any amount is a step forward.
As a start I recommend that you put away a minimum of 4% of any income received, however small or large. That amount may cost you a dinner or some other personal comfort, but I assure you will be thankful later.
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Tips & Advice by Nick Petra, CFP – Founder of Strategic Duck and BizQuack
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