Baby boomers are at an age where they are poised for retirement but unfortunately, not everyone will get their dream. Apparently, a lot of them will not only forego an early retirement and wait until they reach 80 to retire, but they may have to keep on working until they “drop”.
One of the biggest contributor to this is the fact that what they make is not enough to pay off debt acquired over the years. There are a few more considerations such as lack of proper retirement planning leading to less than desired funding and the fear of diminished social security checks and medical expenses.
The middle class expectations when they retire – according to Wells Fargo
In a recent press release from Wells Fargo, they discussed a survey that gave us statistics about the dilemma of would-be retirees – especially those within the middle class range. Here are the highlights of the Middle Class Retirement study that had around 1,000 respondents between the ages of 26 to 75 years.
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59% of the middle class population prioritize paying their monthly bills.
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13% of this same group prioritize retirement savings.
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42% of middle class Americans say that saving and paying the bills at the same time is not possible.
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48% of the respondents are not confident that they will have enough for retirement.
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34% of the group will retire at least when they are 80 year old.
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39% of those between 40 to 59 years old have a plan for retirement.
According to press release, the study had been done for the past 3 years and Wells Fargo noticed how paying the bills is a growing concern for a lot of them. Not only that, the study shows how these people are not optimistic in having enough funds in the bank for retirement when the time comes for them to actually retire. This is the reason one of the main objectives of the survey is to help people craft a retirement plan to help them in the future.
The survey also shows how a well thought of plan and having the discipline to stick to it can actually make your future a little more brighter. The study discusses how people with a retirement plan are more likely to feel they are on the right track to succeed in their goal as against people who are just winging it and hoping for the best. 52% of the middle class population are confident about retirement even though only 29% have an actual plan for it. Those who have a plan usually have the willpower to do it – around 91% of them at least.
Tips to guarantee your dream retired life
With all these, it cannot underscore more the fact the need to seriously look into your debt situation. If it is one of the primary reason that is preventing you from enjoying the fruits of labor at the time that you should, there must be something seriously wrong that needs to be addressed. Debt cripples a lot of opportunities in life and the survey points out that even would-be-retirees cannot avail of their retirement because of debt.
Surprisingly enough, the 30 year olds, from the same survey, are the ones with the foresight on the need for proper planning and the open-mindedness to look for alternative income generating investments for their retirement age. They are the ones with 401(k) savings and who believe that investment in stocks is a great financial opportunity that could yield much needed income in their twilight years.
If you are worried about your retirement plan while drowning in debt, here are some tips for you.
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Set a target retirement amount. Having a goal will make things easier to plan. Compute how much you will need when you retire by determining how much your chosen lifestyle will cost. Think about where you will retire, if you will downsize and other expected expenses. For instance, have a general checkup so you can prepare for your health expenses.
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Determine how much you should put aside to reach your goal. Using your age as reference, see how much you should be putting aside so you can have your target amount by the time you retire. This computation will tell you if you need to postpone your retirement or you can afford to retire early. You should set a monthly amount that you will stick to.
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Create a budget. After computing your target amount, you should create a budget to incorporate this in your monthly contributions. Make sure that you put it high in your priority.
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Choose a debt relief option. When you have all of this, you need to prepare a plan to pay down what you owe. There are debt relief programs that you can choose from. There are programs like debt consolidation that can allow you to contribute to your retirement plan without a problem.
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Pay down your debts. Like your retirement, your debt payments will have to be taken cared of. As you are building up your retirement fund, you will have to lower your debts at the same time. This is how you prepare for your life when you retire.
The middle class are the people who have a steady income to pay for the things that they need. It is not that they cannot afford to save up for retirement. The main problem lies in the fact that they are spending their money on things that are not important. That leaves them falling short on the things that are more important – like their retirement or debt payments. If they organize things, they should be able to save enough in time for retirement. Planning certainly make a whole lot of difference.
