In its annual survey, 18th Annual Transamerica Retirement Survey, Transamerica, in Wishful Thinking or Within Reach: Three Generations Prepare for “Retirement”, provides a snapshot of the retirement landscape and the challenges facing three generations as they envision and plan for retirement.
It looked at Baby boomers, Gen X and Millennials to assess their retirement wishes, fears, and financial well-being. It also examined how realistic future retirees’ plans are.
Wishful thinking is one of the study’s pervasive themes.
For example, many intend to keep working during retirement. Problem is that that may not be possible because of health reasons or employers who may not be accommodating.
And shaky finances could derail future retirees’ dreams. After all, Baby Boomers have saved just $164,000 (estimated median) in all household retirement accounts.
The study provides copious data about people’s savings habits, retirement income sources, concerns, and so forth.
What may be most valuable, however, is its advice to future retirees about boosting income, maintaining good health, and updating job skills.
Here are some suggestions.
1. Create a budget. Include income, living expenses, paying off debt, and financial goals--building short-term savings and long-term retirement savings.
2. Save for retirement. Start saving for retirement as early as possible and save consistently. Avoid taking loans and early withdrawals from retirement accounts.
3. Pick your employer wisely. Consider your retirement benefits as part of total compensation when evaluating job offers.
4. Participate in employer-sponsored retirement plans. Take full advantage of matching employer contributions and defer as much money as possible. If you don’t have an employer plan, contribute to an IRA.
5. Crunch your numbers. Calculate retirement savings needs, develop a retirement strategy, and write it down. Factor in living expenses, healthcare and long-term care costs, government benefits, and money for funding retirement dreams--travel, family time, and hobbies.
8. Build skills. Be proactive to better the odds of staying employed during retirement.
Keep job skills up to date, stay up employment trends and marketplace needs, and go back to school to learn new skills.
9. Have a Plan B. Be sure to have a backup plan should retirement arrive earlier than planned because of illness or a job loss.