The Changing Retirement Landscape

For many Americans, affording retirement will be a challenge.  Earlier generations of workers could rely on employer-sponsored pensions, generous Social Security cost of living adjustments, (COLAs) and supplemental health care plans to provide long-term financial support.

Unfortunately, many current and future retirees have no such parachute, and here are some of the challenges they will face.

  • Despite what many Americans think, Medicare is not free. There are premiums, coverage gaps, co-pays, long-term care, and a host of other variables that chip away at household budgets.
  • The double-edged sword of longevity means that Americans are living longer, but as a consequence, they are also more likely to outlive their retirement savings.
  • Health care inflation is increasing at more than twice the rate of Social Security COLAs.
  • Few realize that Medicare Part B premiums are directly deducted from Social Security disbursements; therefore, a client’s net monthly benefits will often be lower than he/she expects.
  • For millions of Americans, Medicare Means Testing Surcharges will push annual premiums even higher – from 37% to as much as 200%.
  • A recent GoBankingRates survey reveals that 74% of Americans have less than $100,000 saved for retirement.1 Couple this with exponentially rising health care costs and a financially stable retirement seems a long way off…

Fortunately, with an adequate time horizon and a consistent investment strategy, there is still opportunity to make a difference.  Informing your clients can help them make decisions that can extend the life of their savings and give them the worry-free retirement they desire.



These articles will appear every other Tuesday on our Building Retirement Knowledge page. Check in bi-weekly for the latest post.