November's Top 10 Retirement Facts and Figures | Ed Slott and Company, LLC

November's Top 10 Retirement Facts and Figures

By Jeffrey Levine, Director of Retirement Education
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@IRAGuru4EdSlott

Below is a short list of 10 of the most amazing, surprising and/or illuminating facts about retirement that I read in November. Before each fact, you will find my own brief commentary, and after each fact, you will find the original article from which the fact was pulled should you be interested in further reading. Enjoy!

  1. Think your expenses will drop in retirement? Don’t count on it! – “In the first two years of retirement, 28.0 percent of households spent more than 120 percent of their pre-retirement spending. By the sixth year of retirement 23.4 percent of households still did so.” https://www.ebri.org/pdf/briefspdf/EBRI_IB_420.Nov15.HH-Exp.pdf
     
  2. Are student loans going to be an albatross for today’s graduates, preventing them from adequately saving for retirement? – “More than a third (37%) can’t set aside more money for retirement because they are still paying off student loans.” http://pressroom.aboutschwab.com/press-release/schwab-corporate-retirement-services-news/schwab-survey-millennials-face-unique-set-ob
     
  3. It’s not always a bad move, but there’s no way this many people should be claiming Social Security benefits early! – “Yet the vast majority of individuals – about 72 percent – claim before full retirement age.” http://www.nber.org/digest/nov15/w21544.html
     
  4. We have to do better than this if we want to avoid the looming retirement crisis – “Yet nearly one-third of working-age Americans have no retirement savings or pension, and less than half of all private-sector workers participated in a retirement plan at work in 2013, the last year for which data are available.” https://cdn.americanprogress.org/wp-content/uploads/2015/10/29075443/ExistingRetirementIncentives-brief.pdf
     
  5. Give it to me straight, doc! – “77% [of millennials] want to be told the stark reality of their post-retirement finances and health, demanding more shocking messaging from insurers and other financial services providers.” https://www.bnymellon.com/_global-assets/pdf/our-thinking/generation-lost.pdf
     
  6. Why don’t we just put different dollar amounts up on a board and throw darts at them? At least it would be more fun that way – “An overwhelming 90% estimate the amount they will need in retirement by taking a blind or educated guess rather than base it on industry data.” https://www.bnymellon.com/_global-assets/pdf/our-thinking/generation-lost.pdf
     
  7. Think again... – “Only about 25 percent of women and 30 percent of men believe they will continue to work past age 65.” http://myirionline.org/docs/default-source/research/women-39-s-perspectives-on-saving-investing-and-retirement-planning.pdf?sfvrsn=2
     
  8. Women have a better understanding of the benefits of delaying Social Security, but frankly neither men nor women have a good grip on this issue – “Understanding that Social Security benefits will increase about 75% for a 62-year-old retiree who waits until age 70 to claim benefits: 14 percent of women versus 10 percent of men.” http://myirionline.org/docs/default-source/research/women-39-s-perspectives-on-saving-investing-and-retirement-planning.pdf?sfvrsn=2
     
  9. Try to think of something else 80% of all Americans have in common – “...about 80 percent of working households approaching retirement have resources earmarked for retirement that are tax-deferred...” https://www.ici.org/pdf/per21-07.pdf
     
  10. This should be as important in your planning as any other risk in retirement – “Institute research shows only 1 in 4 retirees express major concern about longevity risk, even though half of 65-year-olds will live into their late 80s." http://www.limra.com/Posts/PR/Industry_Trends_Blog/Confidence_and_Reality_Often_at_Odds_When_Planning_for_Retirement.aspx
     

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