How to Set the Path to Retirement in the 21st Century
Like traveling toward your summer road trip’s destination, planning is an important piece to help you get to your ultimate career destination: retirement. While Otto von Bismarck may have pioneered a public-sponsored retirement plan in 1889, it wasn’t until Franklin Roosevelt penned the Social Security Act in 1935 that the idea of retirement for Americans came into being. Ever since, Americans have envisioned, then celebrated, reaching the stage between work and death – retirement.
As progress and decades marched on, and savings and life expectancy improved, Americans added more years to the retirement period, while sometimes adding fewer to the working period. As we move further into the 21st century, these changes have led to several considerations to review now as we look forward to celebrating retirement, no matter how far down the road it might be.
What Does Retirement Mean to You?
For much of the 20th century, many Americans didn’t experience a long retirement period. Later, as retirement packages were extended, or due to corporate layoffs or sufficient savings, retirement came earlier than expected, and Americans could relax and “enjoy the good life.” However, many of today’s retirees are still struggling, even a decade after the Great Recession. A financial security survey conducted by COUNTRY Financial in May 2017 showed that more than a third of Illinoisans (36 percent) worry they either will not be able to retire or will need to delay retirement in the future. Retirement means different things for different individuals. As you think about your life after your current career, how will you remain active and engaged? What will you be retiring to?
Planning for Health Care
The recent COUNTRY Financial survey also showed Illinoisans report their top financial concern is affording health care costs (44 percent). We’re all using health care dollars, even if we’re healthy. A good rule of thumb is to strive to keep health care expenses to about 12 percent of your annual spending amount.
The Impact of Moving Into Retirement
During much of the 1900s, families were less dispersed. As they spread apart, many retirees headed seemingly, automatically, for warmer climates. But with longer lives, and sometimes not as healthy as we’d like, does it make sense to live closer to family? Or if you do decide to move – will the area you choose allow you to remain engaged, stay active and have access to quality health care?
Why Your Debt Should Retire Before You Do
With student loans, credit card debt and health care issues, we’re likely to be carrying more debt into retirement than prior generations. Few would want to spend their retirement reconsidering poor decisions. Seek assistance now with budgeting, debt consolidation, reverse mortgages or other means to reduce the debt burden.
It’s a brave new world out there. Don’t forget to consider recognizing the increasing risks associated with retirement. Take control of what you can. Save as much as you can, as early as you can. Monitor your spending, have a budget and stick to it. The future you save might be your own.
The COUNTRY Financial Connect blog includes some additional information and tips as you begin your ride toward retirement. Visit cfin.us/retire.