The growing fear of the American public
On February 28, 2017 Bloomberg published an article by Suzanne Woolley with the title, “More Americans Live in Fear of Retiring Poor.”1 Just seven days earlier, Bloomberg subtitled an article by Ben Steverman, “A dark, detailed new look at why many employees may never be able to retire.”2 On March 1, Emily Zulz of Think Advisor began an article, “More than half of households are at risk of being unable to maintain their standard of living in retirement.”3
Much in these reports is based upon studies showing that Americans are not saving enough. Steverman stated in the aforementioned article, “Two-thirds of all Americans don’t contribute anything to a 401(k) or other retirement account available through their employer.” Nevin Adams, the Chief of Communications for the American Retirement Association, has stated this fear is unfounded and the claims in the report are indeed, “Fake News.”4 While, Adams provides solid information in opposition to the negative statistics, the reports have gained traction. Fear about retirement is increasing.
Appealing solutions to the problem
According to a March 2, 2017 LIMRA Secure Retirement Institute study, 53 percent of employees think their companies should be required to provide retirement plans. Sixty percent of the nearly 2,500 surveyed think employers should be mandated to put money into their employees retirement accounts. Slightly more say they would be more likely to set aside money for retirement if they had access to an employer sponsored plan.5
With the wall of fear imposing and growing, some employees give voice to a sense of an entitlement to a safe retirement. However, only 11% expressed confidence in allowing the US Government to run their retirement. The myRA plan created and run by the federal government has not proven popular with the American public. Three-fourths of the study respondents expressed a preference for a private plan available through their employer, and nearly 90% said investment options were important.6
Take advantage of opportunities available to you NOW
If Americans believe providing for retirement is a personal responsibility rather than an entitlement, it is time to take advantage of opportunities available! While we admit the existence of obstacles to accumulating funds for the future, dwelling upon the fear of retiring poor will only result in a self fulfilling prophecy. Committing to a more thrifty current lifestyle and setting aside money for retirement regularly will overcome all the fears and obstacles!
The first step in building the retirement of your dreams is providing predictable monthly income. Social Security is the first leg this retirement stool. While future benefits may ultimately be different that those promised, there is currently no political appetite to scuttle the system.
Designed to supplement Social Security and other retirement vehicles, the Christian Churches Pension Plan has been trusted by thousands of people since 1969. The Pension Plan allows church, mission, and nonprofit personnel to add monthly income for life as a reliable second leg to a retirement plan.
Then we can turn to IRAa, 401(k) or 403(b) accounts, stock or bond mutual funds, guaranteed annuities, exchange traded index funds, Real Estate Investment Trusts, Master Limited Partnerships, or individual securities as potential retirement vehicles. Each individual and family should seek competent advice and make investments in keeping with levels of understanding, goals, and risk tolerance. The key is to commit to a plan of thrift and saving and following through with action. As time passes, we may look back at the time our retirement began moving from dream toward reality.
1 More Americans Live in Fear of Retiring Poor. Woolley, Suzanne. Bloomberg. February 28, 2017
2 Two-Thirds of Americans Aren’t Putting Money in Their 401(k). Steverman, Ben. Bloomberg. February 21, 2017.
3 19% of Households Are ‘Not Worried Enough’ About Retirement. Zulz, Emily. ThinkAdvisor. March 1, 2017
4 Fake News – It’s Worse Than You Thought. Adams, Nevin. napa-net.org. February 28, 2017.
5 Retirement Plans Should Be Mandated, Employees Say. Demasters, Karen. Financial Advisor Magazine. March 3, 2017.
6 Most Workers Want Access to DC Plans. Simon, Javier. plansponsor.com