Baby Boomers - Listen Up! If you are a mid-life baby boomer, you may need to pay more attention to your retirement planning in order to assure you will have an adequate income and be able to provide for unexpected long-term care expenses after you retire, according to a recent survey sponsored by the American Council Of Life Insurance (ACLI). Findings show that two-thirds of you are extremely or very concerned about cutbacks in Social Security and Medicare, and also about how inflation will affect your retirement savings. The problem is, many of you are in denial about these issues and how they will impact your retirement, which could last 25 or 30 years. Apparently you continue to believe that your retirement plan and/or federal entitlement programs, together with your savings, will provide a firm retirement foundation. Not so, according to the survey. Only half of American workers that have not yet retired are covered by a pension plan, according to the National Commission on Retirement Policy. Defined benefit plans, which provide a steady flow of income for life, are on the decline, replaced by salary reduction (defined contribution) plans. Under a salary reduction plan, you are responsible for managing your retirement funds . The problem is that many people change jobs or leave salary reduction plans for other reasons. About 66% of those who do will lose benefits by not rolling over distributions into other retirement accounts. Now, about that long awaited retirement that could last 30 years or more. Managing your retirement over that period of time could prove difficult. Without sufficient funds, it would be very hard to maintain even a moderate standard of living. You could outlive your income or incur heavy long-term care expensive because of your longer life span. When asked about these issues, 9 out of 10 survey respondents said it is important to know how much money they will need to save for retirement. But they said they can’t determine how much it will take because they don’t know how long they will live. Two-thirds said they are aware of the high cost of long-term care. Half said long-term care insurance is the most desirable option for paying the costs of nursing care. But relatively few said they have taken concrete steps towards obtaining long-term care insurance. If the findings of this survey are any indication, many baby boomers need to get serious about issues that will significantly impact their futures. Predicting how much you will need to maintain a secure and comfortable retirement may take some real thinking through. Once you have an answer (because of all the factors involved, it may not be the right one), you will have to determine the best way to accumulate the money. Next you have to commit to your plan (that may be the toughest part). Finally, you will have to continually manage your funds throughout your retirement to assure you won’t run out of dollars before you run out of time. Assuring that the expense of long-term care won’t consume your savings and other assets can be much easier. Contact a knowledgeable agent specializing in long-term care insurance. Choose the best plan for you. Then be sure your premiums are paid when they come due. But don’t put it off – premiums can triple between age 50 and age 70. Waiting could cost you thousands of dollars over time.
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