Most Americans rely on the 401(k) plan as their sole source of retirement. Unfortunately the plans today are assembled like the 401(k0 was a supplement to a pension plan. This must change for Americans to prepare financially to reach age 100.
According to findings from a new survey from Merrill Lynch, 58% of affluent Americans have a positive view of the prospect of living to be 100. However, three out of four would approach their money managementdifferently if they knew today that they were going to live that long. A few things they’d consider are continuing to work part-time during retirement (39%), investing in an annuity (32%), contributing more to a savings vehicle (32%) and retiring closer to 85 rather than 65 (25%).In light of longer life expectancies, the majority of respondents (59%) also believe that the age at which Americans are eligible to collect Social Security should be raised.
The budget crisis at the state level has required many states to off load some of the retirement benefit costs to employees. This crisis will affect what private sector employees think about their own retirement goals. They will require a plan which more resembles a pension plan rather than the current model.
Please comment or call to discuss how this will affect you and your employees.
- The Growing Challenge of Funding Retirement (money.usnews.com)
- Life Expectancy Quiz: ‘The Revolution’ Tests Longevity (huffingtonpost.com)
- Embrace the brave new world of retirement (telegraph.co.uk)