If You Don't Know How Much You're Going to Need in Retirement, Hire a Financial Advisor to Help You Figure It Out.
Ric Edelman: Let me ask you this question. Do you fear that you might run out of money in retirement? Well, you're not alone. 36% of Americans have that fear. And you're not crazy to have that fear. The amount of money that people are going to need in retirement and the amount of money they actually are going to have, according to a new study from Tibor Price, it's a $4 trillion gap. So, yeah, you'd better start saving now if you aren't already. And if you are already saving, you better start saving even more on the heels of all this. Fidelity has just released its 2022 State of Retirement Planning Survey. Right now, 25% of Americans are less confident about their retirement security than they were before the pandemic began. But here's an interesting stat. Men are more confident than women, 33% more confident. Now you've got to really think about that. If men are 33% more confident, the simple question is, is that confidence well placed? If you're married, you might want to have a conversation with your spouse and see who's really right about this. Let's make sure you're not too cavalier and let's make sure you're not worrying about nothing at the same time. By the way, do you have a financial plan? Those who do are 50% more likely to say that they know how much they're going to need in order to afford retirement then those who don't have a financial plan.
Ric Edelman: So the message here is very clear. If you don't know how much you're going to need in retirement, well, just hire a financial advisor to help you figure that out. And at the Boston College Center for Retirement Research, they have found that more than half of U.S. households are at risk of being unable to maintain their standard of living in retirement. It was 40% in 2007. It's now 51% now. Why are so many more households unlikely to be able to maintain their standard of living in retirement? Well, two big reasons. Number one, we're living longer. Longer life expectancy as well. The longer you're going to live, the more money you're going to need while your money lasts as long as you do and in your effort to generate the income you need in retirement. Well, double whammy. Not only are you living longer, but you have a bigger challenge in generating the income you need because of low interest rates coupled with high inflation rates. So everything costs more at the very moment you're earning less to be able to afford and pay for it. And this is why, for all these reasons, we need to make sure that we are earning more money, earning it longer, and saving more of it at higher rates of return to be able to generate the money we're going to need for our nest egg and retirement.