Baby Boomer may need to work longer to boost long range retirement security

Due to the fact that fewer Americans have access to Defined Benefit plans, or pensions, I believe business owners and other employers may make some changes geared toward getting employees to save more - and plan more for retirement over the next few years.

A recent study, sponsored by Transamerica asked industry experts to predict what changes are expected for the next five years. 
It seems the biggest change will be in placing more emphasis on retirement readiness, rather than just getting employees to join a plan and to  contribute and focusing on actual retirement outcomes. To me it reflects the apprehension I see of many people who come to our workshops. Many feel they are approaching retirement unprepared. This may also the result of the fact that many advisors only focus on accumulation and growing of asset. They mostly work with younger clientele and don't have a lot of experience in planning for the distribution part of retirement.

If not being prepared for retirement is something you're worried about, you are not alone. Many Americans share your concern. 

Based on number of studies released this year, less than 15% of employees believe they are prepared for retirement and only 12% of employers believe their employees will be financially ready to retire.

A number of current baby boomers will be unable to retire at what they always considered a "normal" retirement age, what is sometime referred to as Aging Worker Syndrome. 
The federal Age Discrimination in Employment Act (ADEA) pretty much ruled out mandatory retirement ages. 
Since the recent recession many Americans saw their retirement saving plummet. Some were put into inappropriate asset classes that did not include enough safety measurements. Many who were within a few years from retirement invested large portions of their retirement savings without considering their current station in life. 
This is one of the reasons a rising number of older workers may be forced to stay on the job longer. 
Than there are those who simply like working, but many need to keep working because they nned the money or the benefits.

One study found that 36% of workers expect to stay on the job past age 65, up from 11% in 1991. 

About 25% of workers expect to retire before age 65 - just about half as many as expected to do so in 1991.

 

Working longer is one of the best ways to boost long-range retirement security. This fact causes Employers to be concerned about  productivity issues, higher healthcare costs, and their ability to attract future talent to the business.

Since defined-contribution plans are likely to be the main source of retirement income for many workers, it is probably a good idea to set specific goals for your 401(k) and track your progress and how much you need to be saving to make certain you're on track to meet your retirement goals. You can be the master of your destiny and be able to fund a comfortable retirement...and at the age you wish to retire. If you plan right.

In our practice we recommend that you calculate what your monthly expenses may be at retirement as close as you can, and start preparing plans that can enable you to generate the amount of income you will need on a monthly basis. These plans should include instruments that can be depended on regardless of market conditions. This is especially true if you are within five to ten years of retirement,

Depending on your station in life, risk tolerance, family situation and other variables, you can set aside a portion of your savings and or 401(k) in an instrument that links returns to market performance but isn't invested in the stock market.

Ask your advisor which programs are approved in your state and fit your situation. Make sure you find out about all the features and limitations as some of these programs require a time commitment in order to be beneficial or may have costs associated if you change your mind and decide to do something else.

Another trend you might want to examine may be to incorporate funding a portion of your retirement income through a defined benefit plan partially funded with a life insurance policy. 
This may be an especially good way for business owners to set aside larger contributions toward their own retirement although anyone can benefit from it. When done properly, it can potentially reduce the amount of taxes paid by the business.
Contributions to such plans may also be more substantial than the limits permitted by traditional qualified plans guideline and allow you to discriminate when making contributions.  

Some studies show certain trends developing:

-Increased professional advisors. 
-More Employer provided advisory services similar to ones that have been around for a number of years. 
-Expect advisors to encourage participants to consolidate retirement assets, IRA's and 401(k)s to create more accurate picture of readiness.

-Increased automation. Automatic enrollment of new employees has raised participation rates in recent years. The trend may continue and employee enrollment contribution rates may rise as high as 6% from a current average of 3%, which I call: a "good thing".

-More mobile platforms apps. Retirement planning apps copycatting online games, can provide retirement readiness alert messages, and offer access to your plan balance on your mobile devices.

The opinions and information expressed in this post are only meant to be helpful in educating and preparing you for retirement and are not meant as a recommendations to purchase or an offer to sell any product. Whenever considering an investment or making a financial decision, always consult with an appropriate Advisor, legal or tax consultant.