What do you fear about retirement?

Jul 5, 2008

Americans Know Little about Retirement Planning

Most Americans spend more time planning for vacations and holidays than planning for their retirement, according to the Employee Benefit Research Institute. No wonder they know little about retirement planning.

This past January, the first Baby Boomers turned 62, marking a new era, as approximately 78 million of them move toward retirement. Alas, today, many retirees don't really retire. They keep on working into their 70s and beyond, just to make ends meet. For some, their pension plans didn't pan out according to their retirement plan, paying only 30 to 40 percent of what they expected.

Scott Pyle, managing director of Pyle/Cunningham Wealth Management Group of Wachovia Securities, said it's quite a blow for these folks who've worked hard their whole lives, just to have to change strategies quickly at retirement time.

It forces them to "transition" into retirement, by working another 10 years and reinvesting their pension money, so that they can have enough money to live on when they do actually retire.

Pyle says this retirement generation faced two very big surprises: They're living much longer than they expected. And as a result they have to go back to work, or face cutting back on their lifestyle and their quality of healthcare.

And Pyle said if you think Social Security is your retirement plan, think again. "Many people that are putting into the Social Security Plan think this will be a retirement plan. But Congress can change
any benefits as we see it," he added.

Pyle has one simple word of advice - budget. He says it's the best way to avoid the risks that many retirees face today. "Over 80 percent of Americans do not have a formal written budget, and if you don't know how much you're spending, the money is just going to fall through your fingers," Pyle said.

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