Retirement financial projections
Your economic security during retirement depends on your work status, marriage status, living arrangements, as well as your lifestyle and health status. A recent study shows the differences in economic status during the golden years of 67 and 80.
The survey found that while some will have more income at age 80 than they did at 67, many will have much less. The statistics of the study found that two-fifths of retirees will see a decline of $16,000 from 67 to 80 years of age, and two-fifths of baby boomers will see a decline of nearly $23,000.
The reasons are many, but at the top of the list is retirement and loss of a spouse. It is estimated that one-sixth of retirees lose a spouse to divorce or death during these later years and in turn, see a 35 percent drop in income.
Retirement is the second leading cause of income decline, showing a 25 percent drop in income.
On a positive note, the survey found that those who marry or start working during these years see an increase in income. Although, it is more likely that one will leave the workforce during these years, not return to it. It is also less likely that one will get married during these years, though the number of marriages in the later years is increasing. Still, these occurrences, while less common, do add to financial security.
On another positive note, the survey found that baby boomers are estimated to have more financially security between the ages of 67 and 80 than current retirees.
Although these projections show more financial security for boomers, consideration was not made for the potential changes in Medicare, Medicaid, long-term health insurance and Social Security retirement and disability. Policy makers are still debating these issues. The future of health care is still uncertain and many are projecting that benefits will decline in the coming years, not increase.
While being financially secure for the first couple of years of retirement is necessary, the survey finds it may not be enough. Retirees in the future need to start saving as early as possible to be able to finance their golden years. It appears imperative that, with the uncertainty of future health care and disability benefits looming in the background, people should start saving as young as possible. In addition, they must save for a potentially long life, and factor in health issues, death of a spouse and the possibility that they may not have a way to bring in extra finances during these years.
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