Sobering Statistics on Your Chances To Retire
NEW YORK (MainStreet) Nearly 20% of Americans expect they will never beable to afford to retire, according to a survey by HSBC, a financial services company.
The future appears particularly bleak for those who are divorced or separated -- 33% of them believe retirement is out of the picture. And talk about rude awakenings, nearly half (44%) of the people who had already retired reported they hadn't prepared adequately or at all to make their retirement years golden, and almost half of them realized that after retiring. About 12% of them said they'd be forced to go back to work.
It's no secret that many people overspend and simply fail to save enough to retire comfortably. However, that is not the only factor that plays into the financial short-fall equation. Some people in retirement are helping to support other family members -- their adult children, elderly parents and grandchildren. Further, for some retirees, expenses increase rather than decrease as their health fails.
But there's at least one other reason as to why future retirees may not have enough money to support their retirement: 401(k)s. Few companies still provide pensions to their retirees. 401(k)s were supposed to replace these benefits with adequate retirement income, but even for those workers who save for retirement, the dollars are not adding up as fast as they could have.
The reason? Fees and they're typically higher at small firms than at large businesses. In 35 years, today's investors can expect that the higher 401(k) fees that are charged by smaller employers could cost more than $113,000 over the lower fees charged by large employers, according to a Bankrate.com projection.
But for those pre-retirees who are healthy and nearing retirement age with no retirement in sight, there may be a silver lining to the gloom they face. According the HSBC survey, 64% of those who were semi-retired wished that they had continued as full-time employees, largely because they viewed work as an important way to keep their minds and bodies active.
However, for those nearing retirement who may want to occupy themselves with something other than work.
"The best thing [they] can do is increase contributions to their retirement plans and/or taxable accounts" says Michael Solari of Solari Financial Planning. "This will force them to live off less during pre-retiree days and have more during retirement."
--Written for MainStreet by S.Z. Berg, author of College on the Cheap