Did you know that 55% of American workers plan to work even during retirement? While the concept of ‘retirement’ may conjure up blissful images of long walks, sunny days and leisurely reading, the reality is that many retirees are forced to continue working to sustain their lifestyle for many more years.
Sometimes, they do not have enough money set aside to support their remaining years. Do you want to break this mold, and prepare now for a long and blissful retirement where you can be financially free? I will share these 5 fascinating facts about retirement to help you plan for some of the most relaxing and rewarding years of your life.
1) Fixed Interest Annuities Are a Great Tool
A fixed interest annuity can be a great tool to use while preparing for retirement. It allows a buyer to have a fixed interest rate for their financial contributions into an account for a set period. They provide great income protection because they are a low-risk investment portal.
Another method to have an annuity is to purchase it with a larger portion of investment money. Once purchased, it begins growing and slowly compounding over time. When it is tapped, the monthly outlay will have grown since when the annuity began.
This investment type is ideal for people that want very predictable income and low fees to maintain the annuity. While the potential return may not be as large as other investment methods, a fixed annuity’s allure is the safety and peace of mind that it provides for one’s future livelihood during their retirement years. By contributing consistently to the annuity throughout the years, it will grow and yield a foreseeable amount that you can count on.
2) Many People Continue to Work in Retirement
This fact may be surprising to you because the vision of retirement for many is blissful days of peace without a care in the world. However, while some people continue working during retirement to fund their lifestyle, others do it to keep themselves mentally sharp and active each day.
Working a job that is simple and rewarding has many benefits for new retirees. Having a purpose to get up each day gives the motivation to maintain great physical and mental health into their later years. It also allows them to maintain daily social connections with their co-workers.
As people are living longer due to advancements in technology and lifestyle, it is even more important to stay with it and sharp during those years of retirement. Your friends at Briggs Financial Group would love to help discuss how maintaining a part-time job may play into your retirement plans.
3) It Is Crucial to Start Saving Early
A quarter of Americans increased savings since the onset of COVID-19. Many have become more educated in how to prepare for retirement and began to intentionally invest. The troubling reality is that the average household only has $93,000 in retirement savings, which is not enough to sustain most lifestyles beyond a few years.
A good rule of thumb is to save at least 15% of pre-tax income each year in preparation for retirement if you can, beginning in your mid-twenties. Of course, the earlier you begin this the better, and if you begin investing later in life, it may be wise to set aside more each year.
Consulting with our team at Briggs Financial Group can help determine where you are in the journey, and the best course of action to bolster those retirement savings.
4) Spending Changes During Retirement
Yearly spending for retirees often drops from when they were working full time, because there is less of a money stream. However, many find ways to cut back and simplify their standard of living to enjoy the simpler things. In 2020, the average American over 65 spent nearly $50,000, while the average working person spending nearly $62,000 in a year.
As people get older, things like homes and cars may be closer to being paid off, and the need to acquire new possessions becomes less of a focus. More conservative spending for retirees can mean more quality time where they may enjoy their hard-earned time off. Working with a financial professional may help you to develop a realistic budget to help enjoy retirement, worry-free.
5) Social Security Should Not Be Solely Relied Upon
Since 2019, roughly 25 million more people have begun using social security to support their retirement funds, with the average monthly benefit being $1,544. While this can be a helpful supplementary piece, it often is not enough to cover monthly expenses. Furthermore, not all careers include social security deductions, allowing employees to later collect.
While social security can be a great supplementary tool, it is crucial to have other measures. Payments vary for different people based on past work and pay-ins to the system, so the average weekly amount may not be what you receive. Having consistent and strong investments is a more secure route to guarantee comfort in retirement. Now is the time to reach out and learn how to prepare for what could be the most relaxing and blissful years of your later life.
Did reading this make you dream of long walks on the beach and endless worry-free adventures with your loved ones? Use that as an inspiration to set yourself up for a long and sustainable retirement! It is one of the best gifts you can give to yourself in your younger life.
Visiting the team at Briggs Financial Group will help you to organize a plan that works for YOU and your unique financial goals. With the aim of helping clients achieve financial independence and excellent security in their retirement, they will be thrilled to join you on this journey. Give them a call or email today to schedule your meeting. We wish you a wonderful holiday season with your loved ones!