Senior Retirement – Will Your Money Last?

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Senior Retirement

Do you think that your assets are adequate for you to retire? If you are among the well-positioned retirees, the future is likely excellent. For those with government or business pension plans, long term financial success is also likely assured. When two working partners combine their social security, their financial future also appears adequate. Even for those who have saved little, pensions and social security may carry most through senior retirement.

 Social Security

Retiring on social security with out a pension or savings will be very difficult. With a  retirement span of 30-40 years, a combination of a retirement fund and social security may not be adequate. If you are among those on social security alone, you already know the consequences. The average social security payout is $1300 a month. This amount is barely enough to survive. It is below the poverty level. More than 50% of retirees plan on social security being their major source of income. If changes are not made to the system, the amount of monthly social security payments will automatically drop approximately 21% in 2034. One can barely survive with the present payout. How will you survive on even less money per month? The government is unlikely to admit the fact that date of the decrease is likely to be a lot sooner than 17 years from now. Every year they change the date to an earlier year. The government will have to cut social security payment amounts just to have enough funds to pay the participants anything.

Inflation

One factor that seems to be forgotten in relation to all retirement planning is INFLATION. The government constantly tells us we have a 1-2% inflation rate. The inflation rate is greater than the government reports. For those who keep up with the facts, try to buy food or household goods today on yesterday’s income. It.s no secret for those who shop for food, buy supplies, or run a business that prices are rising at a much greater rate than 1-2 %. The US government thinks if they repeat it enough, people will believe it.

Sobering Facts

Let me give you some sobering facts. When I attended college in the early 1970’s at a major university, the entire cost for tuition and living expenses for one year was $1,000. A new car cost between $2,000 and $4,000. I worked in a paper mill making $2.83 per hour. Today, approximately 40 years later, you know the cost of similar items and wages per hour.

Inflation over the past 40 years has been high and will continue to be a factor when it is time for you to retire. If you plan to retire anytime from the age of 55 to the age of 62, you have a high probability of living another 30 years. Your present payments on all services will double to quadruple in the next 30 years. This means you will need between two to four times more income than the present time. This fact is especially true for women, many of whom may survive well into their 100’s. Can you imagine what your assets will be worth in 30-40 years? Successful companies today, who do pay pensions, will probably not exist in 20-40 years.

Where does this leave you? Your financial situation is dubious at best. More and more individuals will have to rely on social security for their financial future. Everyone wants to live as long as possible.  Most would like to leave their children with some assets. However, there will be little left, if any. Our personal debts will undeniably rise.

Maybe the government is right, we have the duty to die. Just kidding of course. The only solution at this point is to be born rich, have a government pension which paces inflation, or work until you can no longer continue. Consider the facts and prepare adequately.