I would like to retire someday. Sooner would be better than later, of course, but I’d really like it to be of my own accord. As a PR professional who often works with companies in the retirement planning industry – and as an aspiring future retiree – I usually find myself taking a great interest in any news related to the topic.
In reviewing the financial news from this past Friday, it seemed that investors were focusing on the monthly employment report. An item that received less attention was the final vote of the President’s deficit commission on a package of budget reforms that could be submitted to Congress for consideration. Among the proposed reforms, the commission had suggested several changes to the Social Security program, including increases to the retirement age and possible benefit cuts. To nobody’s surprise, these changes did not receive enough votes for immediate action.
Taking this all, plus the debate about pensions for public employees, it becomes more and more apparent: if we are collectively becoming less able to depend on pensions and SS to fund our retirement, then the burden falls more heavily on us as individuals. This trend is not new. Most workers under the age of 40 in the US have never participated in a defined benefit pension plan and questions about the long term solvency of SS crop up at least every few years. But with the weaker economy in the last couple of years, meager stock market returns over the past decade, and a recent election that suggested the public wants to rein in spending, the trend seems a little more pronounced now.
So what does that mean for someone who hopes to retire someday? Without knowing how overall trends in retirement planning will evolve, it makes sense to maximize our own savings to the extent that we can. With government and employers potentially taking less responsibility for the quality of our retirement, there are financial products available to take up some of the slack. But the cornerstone of all retirement advice doesn’t seem to have changed all that much: Do your best to prepare yourself for retirement rather than counting on someone else to do it for you.
What do you think? Have you changed your retirement outlook in response to the economic turmoil of the past few years? What resources do you expect to have available when you hit your retirement date?
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