5-Things To Do Before Retirement

By Richard Rosso | February 20, 2019
, 5-Things To Do Before Retirement

Saving for retirement isn’t perfect nor as easy as most financial pundits make it appear.

Certainly, people with steeled fiscal resolve exist; those not diverted by a major financial life event that has threatened or postponed retirement plans should consider themselves fortunate.  Sadly, it’s not the norm.

Today, most retirements are imperfect. Two significant stock market events, a decade or longer wasted for investment accounts to breakeven, a financial crisis, underemployment, pre-retirees taking on student loan debt for children and grandchildren and providing overall financial support for adult children – have taken their toll on those 5-10 years from retirement.

One of the best studies on workers’ retirement insecurity comes from Transamerica’s Center for Retirement Studies® As we discuss in our RIA classes and workshops, Transamerica validates that most workers are counting on Social Security as a meaningful source of retirement income.

In 2018, their key findings included –

Not all have recovered from the Great Recession. Forty-four percent of workers said that they have either fully financially recovered (24 percent) or were not impacted (20 percent) by the Great Recession, a finding that represents a significant improvement since 2014 (29 percent fully recovered or were not impacted).

, 5-Things To Do Before Retirement

 More workers are “very” confident about retirement, but such confidence remains low. Only 18 percent of workers are “very” confident that they will be able to fully retire with a comfortable lifestyle, up from 10 percent in 2013.

  • Retirement plan coverage has increased slightly. Seventy-one percent of workers are offered a 401(k) or similar plan by their employers, a finding that is marginally higher than in 2013 (68 percent).
  • Retirement plan participation and contribution rates have increased. Among workers who are offered a 401(k) or similar plan, 81 percent participate (up slightly from 78 percent in 2013), and they contribute 10 percent (median) of their annual salary (up from 7 percent in 2013).
  • Savings have increased, but not enough to last 20 or more years in retirement. American workers’ total household retirement savings have grown to $71,000 (estimated median) in 2017, up from $53,000 in 2013. Baby Boomer workers, the generation that is currently entering retirement, have saved $164,000 (estimated median) in all household retirement accounts, up from $103,000 in 2013.
  • Many workers plan to keep working in retirement. The majority of workers (56 percent) plans to continue working in retirement, including 14 percent who plan to work full-time and 42 percent who plan to work part-time. These findings are relatively unchanged since 2013 (54 percent). Seventy-one percent of workers are offered a 401(k) or similar plan by their employers, a finding that is marginally higher than in 2013 (68 percent).

There is improvement. However, current median retirement savings especially for Baby Boomers who are closer to retirement, aren’t going to cut it. Not surprisingly, 56% of workers have not recovered from the Great Recession. The truth is Americans are woefully unprepared for retirement.

As such, it takes a change of mind and heart to deal with imperfect retirement. One must make the best out of the current situation and create a “plan b” to move on. Sure, retirement may wind up smaller than originally envisioned. However, that doesn’t mean it can’t be fulfilling. As I jokingly lamented to good friend and Fox reporter Tom Zizka recently – You may need to swap fancy dinners for fried chicken but who doesn’t like fried chicken?

In my interview with KPRC Channel 2’s consumer reporter Amy Davis, I reviewed 5 things pre-retirees should consider – maximizing social security, rethinking lifestyle, working longer, living smaller and reverse mortgage options.

Those who are concerned about pre-retirement preparation should look to attend our next eye-opening two-hour Right-Lane Retirement Class next up in Katy in March. Go to www.riaadvisors.com to check out our events calendar and sign up!

I hope you enjoy the segment.

Talk with an Advisor & Planner Today!


Richard Rosso, MS, CFP, CIMA is the Head of Financial Planning for RIA Advisors. He is also a contributing editor to the “Real Investment Advice” website and published author of “Random Thoughts Of A Money Muse.”  Follow Richard on Twitter
Customer Relationship Summary (Form CRS)

> Back to All Posts