What Is Your Retirement Dream?

Historically, retirees relied on three sources for funding retirement: Social Security, corporate pensions, and personal savings. In 2019 however, the Social Security Administration’s trustee projected that the program’s reserve fund would be depleted by 2035 and that benefits would have to be reduced then if Congress did not take action.1

And with fewer employers offering pensions, it is falling increasingly on Americans to rely on savings and investments to fund their retirements. That is not great news for most American workers.

According to a 2019 study, only 23% of American workers are very confident that they have enough money for a comfortable retirement.2 As a result, more of us will work longer, with two out of three pre-retirees saying that work will be one sources of their retirement income.3

You may have a picture in mind of what retirement will mean for you: Cheering your grandchildren on at ball games. Traveling and seeing the world. Volunteering at your local library or helping out in a classroom. No matter what activities make up your retirement, you will need income to create the lifestyle you have envisioned.

When it comes to planning for retirement income, it is best to start with the basics. What expenses will you need to cover? These costs include housing, utilities, food, transportation, and health care. After identifying how much income you need to cover the essentials, think through the kind of lifestyle you want to lead. How much will you need for things like hobbies, travel, and entertainment?

While it is always good to have a vision for how your retirement will look in an ideal world, unknown and unexpected events can throw a wrench into even your best plans. Taxes, market volatility, inflation and other potential roadblocks could keep you from achieving the type of retirement you have worked for - if you are not prepared.

Maybe you are looking for that extra chunk of income to help you feel more confident about the unexpected. Or maybe you started saving late and need to ramp up your asset growth. Incorporating different retirement savings vehicles into your financial strategy could help you accumulate assets and possibly even allow you to retire sooner than you think you can.

1 Steve Goldstein. MarketWatch. Apnl 22, 2019. "Social Security costs to exceed revenue next year, trustee report shows." https: www.marketwatch.com/story/social security-costs to exceed -revenue -next -year-trustee -report-shows -2019 -04 22. Accessed July 23, 2019.

2 Employee Benefit Research Institute. April 23, 2019. "2019 Retirement Confidence Survey." https://www.ebn.org/docs/default source/rcs/2019- rcs/2019 res short -report.pdf?sfvrsn=85543F2F_4. Accessed June 12, 2019.

'Ibid.

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