Thursday, June 23, 2005

Statistics on Retirement Savings Big Concern

Here are some recent statistics on retirement preparation from the National Retirement Planning Coalition:

  • 64% of full-time workers are behind on their retirement savings programs.
  • 50% of Americans plan to live 16-30 years in retirement -- yet 34% plan to retire between 50 and 64.
  • 95% have some financial fears related to retirement.
  • Only 15% feel they have made progress in planning and saving for retirement over the past 5 years.
  • The typical American household has savings of only about $18,000, and expects pensions and social security to provide for their retirements.
  • 70% of Americans are focused on short-term finances, not retirement finances.
For full details, click here.

Working in retirement may be harder to do than you think.

About 75% of Boomers plan to work during their retirements. An article in today's New York Daily News suggests that there are barriers. The article quotes research by Alicia Munnell, director of the Center for Retirement Research at Boston College who in turn cited results from a survey done by Employee Benefit Research Institute.

Highlights of the article are:

  • On average, those surveyed retire at age 62.
  • "We need to have a policy to change real work patterns and then maybe we can discuss raising the normal retirement age under Social Security," she said.
  • People want to slow down and current work rules don't allow that.
  • Companies are skeptical about hiring older workers.
Is your plan to work in retirement realistic? You may need to develop an outside the box strategy.

Could starting a business help secure your retirement income?

That's an interesting thought. I came across a press release from a company that does seminars to help people learn how to start and run a business that suggests that doing so is a good way to help secure your retirement income. You potentially have income that can continue as you either have other people run the business or sell it.

Many people planning to retire do want to start a business. But your motivation for doing so needs to be more than making money.

Having coached some folks that have started their own businesses, I've gained some insights. The first years for a new businesss generally require a lot of time and effort, and generally results in a money drain rather than a money generator. Your success will have a lot to do with whether starting and running a business is your thing, and how much passion you have for running a small business and for the business itself.

If you think you might want to start a business, here is some advice:

  • Find someone who has nothing to gain from whether you do or don't start the business to help you process the information (a professional life coach with experience coaching people in small business would be ideal).
  • Read The E-Myth Revisited (see link below) to gain a better understanding of what running a small business is like.
  • Do informational interviews with people who have started small businesses like what you are interested in. Have a prepared list of questions.
  • Work free for one of these people for a week or more to get an inside look at what their business is like.

Tuesday, June 21, 2005

Silent Generation Positive About Retirement Income

Metlife published results of a survey they conducted with pre-retirees and retirees age 59-71. They call this group the "silent generation." Here are a few of the findings from the survey that most interested me:

  • There's a correlation between having guaranteed income (annuities and pensions) and comfort level. Over half have some of their assets in annuities.
  • Most feel they have enough money to live comfortably through age 85.
  • Few feel that leaving an inheritance is important.
  • Most overestimate income and underestimate expenses.