Ignoring Retirement Needs? Part 1


retirement needsAre you ignoring retirement needs for your future? That tends to happen when you are younger, retirement needs are far from your mind. You believe you have plenty of time to save for it. Some people ignore the issue until late in life. Then they have to scramble at the last minute to fund their retirement. Others ignore the issue altogether. They think their Social Security income (assuming they qualify for it) will take care of their retirement needs.

What does the government considered 100% Poverty Level?

Current government standards have poverty at an annual household income of $11,770 for a single individual or $15,930 for a married couple. Compare those levels with potential Social Security income, and you may find that your Social Security income alone, will be very disappointing.

Can I predict my social security income?

You can predict your future Social Security income by visiting the Social Security Administration’s Retirement Estimator. The Retirement Estimator allows you to plug in basic information to get an instant, personalized estimate of your future benefits. Different life choices may chagne the course of your future. Try out different scenarios – such as higher and lower future earnings amounts and various retirement dates. These should help you to get a good idea of how these scenarios can change your future benefit amounts. Once you have done this, consider what your retirement would be like with only Social Security income.

Employer, Union or Government-Funded Retirement Plan

If you are lucky enough to have an employer funded, union funded or government funded retirement plan, figure out how much you can expect to receive when you retire. Add that amount to any Social Security benefits you are entitled to. Think about what retirement would be like with that combined income. If this result indicates a less than desirable retirement, know that the sooner you start saving for retirement, the better off you will be.

With today’s relatively low interest rates and up-and-down stock market, it is much more difficult to grow a retirement plan with earnings than it was 10 or 20 years ago. With current interest rates and how they barely mirror inflation rates, there is little or no effective growth. That means you must set aside more of your current earnings for retirement to prepare for a comfortable retirement.

What determines my retirement needs?

Each individual’s financial resources, family obligations, health, life expectancy, and retirement expectations will vary greatly. There is no one-size-fits-all retirement savings strategy for everyone. Purchasing a home and putting children through college are examples of events that can limit an individual’s or family’s ability to make retirement contributions; these events must be accounted for in any retirement planning.

In our next blog we will discuss the different retirement vehicles available to you.

Do you have questions regarding your retirement needs?

If you have questions about any of the retirement vehicles available to you, we invite you to call Alex Franch, BS EA at 781.849.7200. Alex is an enrolled agent with the IRS and he has the knowledge to help you work through these difficult to predict situations. You may also visit our One Source Financial Center or our  Integrated Financial Services page to learn more about our multi-disciplined approach and the difference it can make in your financial life.

Our Financial Center offerings include:

  • Wealth Accumulation Programs
  • Education & Retirement Planning
  • Life, Disability, & Long-Term Care Insurance
  • Employee & Executive Benefits
  • Exit & Succession Planning

Other Sources

For more information, call Alex Franch at 781.789.7200. WorthTax has locations in Norwell, Dedham, and Weymouth, Massachussetts.
Alex Franch

Mr. Franch is a Tax Specialist and Partner at Joseph Cahill & Associates / WorthTax. He has a diverse background including a Bachelor of Science from Boston College in Mathematics and extensive military service. Mr. Franch is an Enrolled Agent and has eight years of tax preparation experience. He has been serving individuals, families, and businesses for several years with tax and financial planning strategies and is a junior partner with the firm. Mr. Franch is licensed by the Financial Industry Regulatory Authority (FINRA) with a Series 6, 63, 65, and 7, and by the Commonwealth of Massachusetts Division of Insurance.

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