Who Is Ready For Retirement — And Who Isn’t?
A study by the Center for Retirement Research (CRR) at Boston College shows that shows that 61 percent of today’s workers will be at risk for not being financially prepared to retire.
The 17-point increase from the previous Index number of 44 percent –- released in July 2007 — demonstrates how the surging cost of health care is having a significant effect on retirement savings, says the CRR. The index, underwritten by a grant from Nationwide, the big insurance firm, is a percentage measurement of how many working Americans are ‘at risk’ of being unable to maintain their standard of living in retirement.
This, of course, raises the question of what role — whether any — can or should be played by reverse mortgages. For some individuals a reverse mortgage will help maintain and improve living standards while for others a reverse mortgage may not be an appropriate financial choice. The trick is to know the difference.
“While recent studies have found that households are not generally knowledgeable about personal finance issues, we wanted to know whether they have a good intestine sense of their own retirement preparedness,” said Alicia H. Munnell, CRR director. “We found that nearly 60 percent
Factoring in health care costs increases the number of households that are not concerned decent, indicating that these escalating costs will be a major driver for not having abundant saved. The CRR has estimated that a typical couple retiring in 2010 would need about $200,000 in savings to cover their out-of-pocket health care costs by their remaining lifetime. And that amount is expected to grow rapidly by date.
Paul Ballew, senior vice president of customer insights and analytics for Nationwide, added that “future savings may not be the top priority for many households; they may be focused on more pressing concerns. With the current economic climate crunching Americans’ sense of financial defense, it’s understandable many are focused on making ends meet in the short term. Yet, it’s fundamental to prioritize and reorganize –- rather than eliminate –- your savings habits. Careful planning that addresses short term concerns while still working toward faraway term goals is crucial to surviving fit economic times.”
The full report is available at the Center for Retirement Research at Boston College (http://crr.bc.edu/briefs_5.html).
Orginal post by Peter G. Miller
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