The retirement crisis that can no longer wait

April 01, 2017 | GET MORE : Economic Trends

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Are you confident in your retirement plan? A new survey found that, if you answered 'no,' you're far from alone.

Are your decorations up? Do you have your holiday meal planned? I’m not talking about Easter. No, I'm referring to National Retirement Planning Week, which is this first week of April. All joking aside, you do need to be ready. Not to celebrate, but to be prepared and ensure you and your family have the retirement you've earned and dreamed of. Based on how Americans have been reportedly saving for retirement, far too many of us will never be able to retire, at least not as we have envisioned.  

For example, in a recent survey from U.S. Bancorp Investments, 70 percent of respondents with less than $100,000 in investable assets reported that they were not confident or unsure they would have enough money to live comfortably through retirement. And only 6 percent of respondents reported being confident they will have enough money to live comfortably throughout retirement. To make matters worse, nearly 60 percent of those 55 and older have a nest egg valued at less than $100,000.

Not good.

Think about this. It is estimated that 10,000 baby boomers now retire each and every day. That's 4 million Americans a year who are depending on their retirement savings to live on for potentially decades to come. This is an issue on a monumental scale with serious economic and social ramifications for our country. We all need to start taking this seriously – and now.

Women in particular face unique retirement challenges. First of all, they statistically live longer than men … often much longer. That means potentially decades more of retirement expenses to fund on their own. Extended lifespans also often mean more significant healthcare expenses and over a longer period of time. And let's not forget the gender "pay gap," which can unfortunately translate into lower retirement savings for women.

And did you know that healthcare costs are the second largest expense in retirement, only second to housing when it comes to major expenses? It is estimated that healthy couples retiring at age 65 can expect to incur $267,000 in medical costs during their retirement years. And healthcare costs are growing at twice the rate of inflation.

The sobering stats go on and on. But rather than avoiding the issue or thinking it’s too late, there are things we can all do now. While there is no magic bullet that can solve this retirement crisis, the most powerful solution is simply to begin. Begin saving. Begin sacrificing. Begin planning. That might mean adding 1 percent more of your income to your company retirement plan, particularly if your employer matches your contribution. Or dedicate your next raise to a personal retirement account. Or forgo that $4 coffee each day and instead put that $120 a month ($1,440 a year) toward your retirement goals.

The bottom line is that it’s never too late to start. Truly. Remember, this is National Retirement Planning Week. If you don't have a retirement plan in place, connect with a qualified financial advisor to develop one soon. The retirement planning process doesn’t have to be overwhelming, and it is well worth it in the end. The time is now to put your retirement plan into action.

Karen Wimbish is head of wealth management products at U.S. Bank.