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In the February/March 2014 issue of AARP magazine, Fidelity Insurance estimates that people who are over age 55 and have worked for the past 10 years have a 401K account that is valued at $269,500. That appears to be a sizable nest egg until you read on and see that Fidelity estimates that a 65 years old couple will need about $220,000 just to cover their medical expenses in retirement. So much for that nest egg hatching your dream retirement! That same article had even more dismal news. The Center for Retirement Research at Boston College reports that the typical account for a worker nearing retirement is only $42,000 , and 55% of current workers don't have any savings at all. AARP estimates that three-quarters of Americans between the ages of 55 and 64 have less than $30,000 in savings! So , it appears that the Boomer Generation didn't do so well in saving for retirement. Is retirement on its way to becoming an outdated concept that is reserved only for the very rich, or is retirement still attainable for most people?
You could keep on working at your job your entire life. I knew a woman who left work on a Friday a few days before their 88th birthday and never returned. But what do you do when your company closes, or your job is phased out, or your health fails, or you just can't tolerate the stress of the daily work grind anymore? You're sixty something, looking at a small social security check that just won't cover your living expenses. What do you do?
You need a plan. You need a financial plan that defines your basic needs, and budgets your income toward meeting those needs. You decide what you really need and what you can do without. If your funds still don't meet your basic needs, seek out additional revenue sources. Today's retirees might not be spending all their time on the golf course, or at the bowling alley, or fishing hole. Today's retirees are actively engaged in life, making productive contributions to society through part time work, child care, or a home business doing what they really enjoy doing and marketing their goods and services for a fee. I know retirees who make things at home and sell the items on eBay to supplement their basic financial needs requirements. After a long career they finally get to do the work that they really enjoy.
Start thinking about what you'd like to do in retirement while you're still working, and do your retirement financial plan. In this way, you'll be able to Create Your Retirement.