Does Your Retirement Plan Give You Confidence?

04/12/2016

If your retirement includes Social Security or part-time employment you may need to rethink your plans.

While the majority of Americans are reportedly confident of their future life in retirement that confidence may be unfounded as the Deseret News discusses in "Are Americans feeling too good about their retirement finances?"

As the article notes, the same survey found that 42% of Americans have not even saved $10,000 for their retirements. Instead of saving and investing money, Americans may be relying on Social Security and the possibility of working part-time during their retirement years.

Both are problematic.

While many seniors can and do work part-time after they retire from their regular employment, the option to do so is not available for everyone. Every year approximately half of the people who retire do so earlier than they had anticipated due to their failing health or the health of a spouse. This suggests that many of the people who are planning to work part-time may not be able to do so.

Retirees may also need to compete with younger workers for the part-time employment. Relying on Social Security is also problematic as it is not meant to be a full pension system. Social Security offers benefits that are less than needed to provide as a cushion against elder poverty.

To avoid an unrealistic look at retirement in the future, it might be helpful to consult with an elder law or estate planning attorney.

Reference: Deseret News (March 27, 2016) "Are Americans feeling too good about their retirement finances?"