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Retirement Planning Study - May 2012According to a May 2012  survey by the Transamerica Center for Retirement Studies, Americans are “winging” their retirement planning. They are heading into retirement without a realistic plan and they may out-live their resources.

Here are some points of concern raised by the study:

1. The Rate of Saving Money Remains Very Low
The median contribution level for workers in 401(k) or similar plans is 7%. With diminished expectations for the stock market, and bond yields and savings account interest rates approaching zero, most people are not going to be able to grow their way to adequate funding. Saving more is the only way to make it work.

2. Retirement targets are also too low
The reason savings rates are so low is probably that people are underestimating how much they will need in retirement. According to the Transamerica study, the median savings goal of American workers is $500,000 — but how many younger workers understand that inflation is likely to cut the value of that amount by at least half by the time they retire?

3. Too many people are relying on guesswork
It’s no surprise that savings rates and retirement planning targets seem off-base, because people simply guess at them. The Transamerica Center found that nearly half (47%) of respondents chose a retirement target by guessing.

4. Funding levels are off target
While the median retirement target is $500,000, the survey found that 39% of workers in their 60s had saved less than $250,000. That leaves them with too much ground to make up in too few years.

5. People seem to be betting on good health
The survey found that most Americans plan to retire after age 65, or not at all. Also, most plan to work after retirement. Working longer may be an inevitability for many people, but it is hardly an ideal retirement planning solution. After all, it means staying healthy enough to work productively, and that is no sure thing for people over 65.

6. Many start planning too late
The survey found that people in their 60s are more likely to have a retirement plan and work with a financial planner than people in their 20s. The problem is that by the time you are in your 60s, your options for significantly improving your retirement funding are very limited.

Call Freeman Owen Jr For Retirement Saving AdviceRetirement planning is a very important individual responsibility. Contact me at (866) 471-7233 for a free consultation so we can determine your specific needs and plan for your retirement days to be the best years of your life!