You may plan to retire — most people do. The question is: Can you?
A recent survey from Moneytips.com suggests you should take this a bit more seriously, before assuming that retirement comes automatically after age 67 (or earlier). In their latest survey, more than 300 each of baby boomers and middle-income generators were asked whether they had clear financial goals and plans. Nearly two-thirds said yes.
The flip side? A third of these people don’t have a clue.
“If you look at middle class Americans, defined as income in $40,000 to $80,000, the financial plan for one third of them is no plan,” said MoneyTips CEO Marc Diana. “I would be expecting that number to be about 20 percent…I would have expected that the baby boomers would have a higher number.” In fact, when asking whether they’ve got enough money to live comfortably, only 57% of the boomers say yes. (The number drops to a stunning 32% for middle income types.) Ouch — a lot of people don’t feel as confident as their “clear financial” goals suggest.
That’s talking about retirement. What about their current standard of living? For middle-incomers, 57% were “comfortable” right now; 61% of the baby boomers agreed. The problem, though, is adding in for specific expenses, like college educations, new homes, cars or remodeling plans. About 53% boomers and 41% middle incomes are ready for it — but that means that 47% boomers and 59% middle incomers are not!
Where do you stand?
Perhaps it’s time to:
*Make solid plans for what life’s going to be like when you retire. Make a list? What’s important to you… what isn’t?
*Decide what you can really afford to do. If you still want to, anyways, how are you going to do it? That around-the-world tour may still be possible…if you’re willing to:
*Take a frugal pill. Now. The more you can cut current expenses (and there are plenty of ways to do so, thanks to the various posts on MLF), the more you have money to save for the future.
*Watch your expenses during retirement, as well. As Donna Freedman points out, when MoneyTips.com surveyed 510 current retirees, only 30% characterized themselves as frugal before retirement — about the same number said they continued to live carefully after they retired. In contrast, 60% or so say they spend “enough to live comfortably.” (They did the same thing before retirement.)
Does that mean, though, that they’ve got enough stashed for the rest of their lives?
Based on Moneytips.com’s other survey…probably not.
“Terms like ‘comfortably’ and ‘frugally’ can mean just about anything you want them to mean,” Freedman comments. “To some, ‘comfortable’ means buying whatever they want, whenever they want it. To others, it means the option of buying things they truly want…saying ‘no’ as often as they say ‘yes.'”
Treat this part of your life seriously, and plan for it — and you may well be able to do both. Moneytips.com is releasing a new ebook that should help: The Retiree Next Door: Successful Seniors’ Surprising Secrets. (Tips and real-life stories from the book are here. One man’s take:“My philosophy is to have a lot of small money coming in from a lot of different directions,” including renting out real estate, cost-cutting and, of course, Social Security.)
The nicest thing of all about The Retiree Next Door? It’s absolutely free. Go here to download a copy — and a better retirement.