Preparing for retirement can often be difficult. As individuals, we have very limited ability to see ourselves in the future, including what our healthcare expenses may be or any hiccups that may occur, such as a job loss.
Because we lead such busy lives, most individuals don’t really think about retirement.
It becomes our responsibility to know how to invest and identify if we are going to need that money at any given point. PBS Frontline discusses this and more of the struggles of retiring in a segment titled The Retirement Gamble.
Essentially, the video segment concludes that if you’re going to die at 69 years of age, you will need to save a heck of a lot less money than if you plan to make it to 95.
As grim as it sounds, it truly becomes the individual’s responsibility to know the amount that will need to be saved and how long he or she is planning to live.
The Demise of Pension Plans – Controlling Your Own Retirement Fund
In the past, pension plans were much easier for the individual to comprehend and help to prepare for retirement. These type of plans were automatic, companies funded the plan for you, and even hired someone to manage it.
In the 1990s, companies underfunded pension plans because the stock market was rising higher. Many companies thought they could use their pension plans to fund other projects. This led to the pensions being underfunded and too costly to continue. This drove greater use of the 401k.
With companies out of the pension business and 401ks being the more suitable retirement option for working individuals, more Americans are facing the difficult process of having to prepare as early as possible for a comfortable quality of life in post-working years. We must face the reality that it is our responsibility to plan for retirement.