Are You Running Out of Time or Money?

 

As most of my friends and I come closer to retirement, the questions looms:  Will we run out of money first or die without being able to spend it all?

According to a recent survey conducted by the Teachers Insurance Annuity Association of America (TIAA), more than half of all Americans (55 percent) believe they will run out of time before they get to do all of the things on their "bucket list." These people believe they have enough retirement savings to last them another 20-30 years and that's why they say they want to make retiring early a top priority  

On the other hand, 45 percent say they worry about running out of money and they say making savings last is their top priority.  Another 30 percent say the events of 2020 have negatively impacted their feelings about their retirement savings and, as a result, they have fallen behind in their retirement savings progress.

More than 70 percent of those surveyed believe it's important to have guaranteed lifetime income, such as an annuity, to make sure your essential expenses are covered and it will allow you to be more flexible in your spending.  So what is an annuity?  It is a long-term investment that is issued by an insurance company and designed to help protect you from the risk of outliving your income.  Learn more here:  Annuity

The top barriers of saving more for retirement include:

Outstanding debt

Low wages

More need for emergency funds

Other savings priorities

So where do you see yourself when it comes to retirement?  Do you think you'll run out of money or time? 

Will You Outlast Your Retirement Savings?

It used to be when you retired you got a gold watch (or some other trinket), a send-off party, and a nice pension to rely on every month in addition to your social security check.  At one time nearly 90 percent of private sector workers had a pension as their workplace retirement plan which was FULLY FUNDED by the employer.  Today that number is down to 33 percent.

These days the idea of collecting a pension from your employer is practically non-existent. Unlike our parents, most baby boomers aren't likely to spend their entire working lives on one job to benefit from a pension.  In addition, more employers have opted to offer 401K retirement plans where you have to contribute a portion of your salary if you expect to get anything in return. 

According to a survey by the Insured Retirement Institute, only 24 percent of baby boomers were confident their savings would last throughout their retirement years.  That's a dismal thought considering the fact that we are retiring at a rate of 10,000 per day through at least 2030.  What's even more dismal is the survey also indicates approximately 35 million of us lack any retirement savings today.

Admit it.  If you knew then what you know now, you would've been saving like crazy.  Back in the 80's I had a retirement savings plan.  I had no real clue of its value so I used it as my personal spending account.  I FAILED to plan for my future life expectancy and even though I pride myself with being smart I was financially illiterate.  I had a lack of knowledge about what it meant to do retirement planning and saving and when you have a LACK OF KNOWLEDGE you have a lack of savings and investments.

 Financial Investment Advisor, Chris Gure says "Baby Boomers have spend the last 30 plus years in the workforce accumulating their savings in order to retire.  It should be imperative to them to have a trusted financial advisor to help alleviate their financial stress." And while the 401K may help jump start your retirement, Gure says it may not always be tailored for a retiree's changing investment needs, transitioning from accumulation to distribution isn't always easy and that's why it's important and helpful to have someone guiding you through the process.

There's an old Chinese proverb that says, The best time to plant a tree was 20 years ago. The second best time is now (or 40 years depending on how old you are).

How Long Will You Have to Work Before You Can Retire?

The news is not looking good if you take stock in a new survey regarding retirement.  According to research conducted by GoBankingRates.Com, 1 in 5 Americans fear they may never be able to stop working because there won't be enough money to live on.  Although the survey doesn't address why these fears exist, is is safe to say lower wage-paying jobs and fewer job opportunities are having a significant impact.  What should also be duly noted here is the fact that, because of a tight job market, you may find Millennials and older adults competing for the same jobs.

Baby Boomers, between the ages of 55-64 reflect the largest group that is skeptical of being able to leave the workforce at retirement age (27 percent), followed by Generation Y (25 percent) and Millennials (20 percent).

In addition to retirement woes, those surveyed are also worried about:

1)  Living paycheck to paycheck

2)  Living in debt forever

3)  Losing their jobs

4)  Losing all of their money in the stock market

5) Never being able to afford a home

6) Always having a low credit score

When it comes to gender, more women than men fear living from paycheck to paycheck, while more men are worried they will never be able to retire.  Both men and women say their least fear is always having a low credit score.

If you break it down by region, it appears people living in the South have the greatest fears of never being able to retire and always living from paycheck to paycheck----in comparison to people in the Northeast whose biggest fear is living in debt forever.

What are some of your biggest financial fears as you age?

Are Baby Boomers Responsible for Child Poverty?

If Baby Boomers have so much money as it keeps being reported by various media sources, why is it that so many of our children and grandchildren are living below poverty?

New Poverty Data released today by the U.S. Census Bureau indicates the number of children under 18 living BELOW poverty continues to climb---with 37 states showing an increase from 2000 to 2006.

I guess it should come as no surprise that the southern states lead the way when it comes to rural children not having enough. Even less of a surprise are the number one and two states which have the highest rates: Mississippi and Louisiana. In Mississippi, there are nearly 150,000 children living below the poverty line with an overall under 18 population of a little more than 421,000. In Louisiana, there are more than 101,000 children living below poverty. That number jumped significantly from 2006 when the total was 92,000. Could Katrina have something to do with that?

In North Carolina, where I live, the number increased from 128,000 in 2006 to more than 157,000 in 2006. In Ohio, where I used to live, the number of children living below poverty in 2006 was 128,000---up from 73,000 in 2000.

On the other side of the spectrum, Connecticut has the lowest poverty level among children under 18 with 5,993 but even that is significantly higher than the 2000 reported number of 2336.

These are startling statistics! How can this be? Who is responsible for this? Haven’t we figured out YET that the child poverty rate is widely used as an indicator of a child well-being since growing up in poverty often compromises the future health status and educational attainment of these young people? Changes in child poverty signal important changes in a child’s quality of life and future outcomes.

What are we baby boomers---especially the really rich ones--- spending our money on if we’re not spending it on our kids and grandkids? Oh, maybe we’re spending it on vacations, RV’s and other frivolous things so we can get away from them? How sad.

African American Baby Boomers and Money

I was doing a search online recently and came across a rather interesting site. A company called NextMark (www.nextmark.com) had released some statistical information on African-American baby boomers. It included the number of black women in each state; the number of black women with children per state; the number of magazine buyers; book readers, etc.

But what really caught my eye was the number of African-American baby boomers making $75,000 or more and what states they were concentrated in. The study was actually broken down into baby boomers making $75,000 and those making $100,000. Much to my surprise, the big states like California and New York were NOT number one in either category, which makes me question how the numbers were gathered.

What was even more surprising is the state that claims the number one spot for black baby boomers making $75,000 or more. Do you think you could guess? I couldn’t. It’s Maryland. According to NextMark, there are approximately 59,000 black baby boomers making $75,000. Maryland, meanwhile, has a population of nearly 5,300,000 (according to the 2000 Census) in comparison to California which has a population of nearly 34,000,000 but just 21,069 black baby boomers making $75,000. And California didn’t even make the top five. How could that be with all of the black celebrities there? Is their income being reported? Or are they just not included in this list?

Here are the top five states where black baby boomers are making $75,000 or more:

Maryland
Georgia
NY
Illinois
Texas

What I found startling about the top five states is Texas has four times the population of Maryland but has only around 27,000 black baby boomers making at least $75,000.

The bottom five states that show black baby boomers making $75,000 or more:

Vermont
Wyoming
Rhode Island
North Dakota
South Dakota

First of all, I didn’t even know these bottom five states had a recognizable black population so maybe that means that if you’re black living in one of these states, the chances are greater that you can make a decent wage. According to NextMark, South Dakota has 166 black baby boomers making at least $75,000; North Dakota has 141, Rhode Island 103, Wyoming, 93 and Vermont has 58.

Keep in mind the overall population statistics are based on the 2000 census so there may be significant changes in some states---but I kind of doubt it. What is sad is the fact that there are 36 million blacks in the US according to a March 2002 report by the Census Bureau. Talk about disproportionate wealth.

Can You Afford to Live after Retirement?

We Baby Boomer Divas love to shop til' we drop! But I've recently discovered that I may end up passing out and be in need of some serious resuscitation when it comes to looking for a place to live out my golden years.

Unlike the old days when people just migrated South because of the nice, warm weather, I'm not necessarily looking for the warmest climate but I am looking to go where the action is. Retired does NOT mean dead so I want to make sure I'm in a place that is thriving with lots of night life and entertainment. But it looks as though the places I would be considering at this time are way out of my price range.

Take SAN FRANCISCO for example:

Typical monthly mortgage payment: $3,536. And that's only to live in the house. Never mind the furniture, transportation, groceries, parties, etc.

Then there's the beautiful suburbs of OXNARD-THOUSAND OAKS where the typical monthly mortgage payment is $3,252.

Dionne Warwick once asked the question, "Do you know the way to SAN JOSE?" Well, looking at a monthly mortgage payment of $3,668, coupled with a property-tax payment of $308 makes me glad I don't know how to get there!


And why is it that 7 out of the top 10 most expensive places to live in the U.S. are all in California? Hasn't anyone told real estate developers out there that the whole state is going to fall into the ocean soon? Shouldn't that mean we could get record deals on housing?

It doesn't get any better if I want to retire in the city that never sleeps. The typical monthly housing payment in New York is $2,262.

Well at these prices I might just have to stay right where I am.

To read more about the most expensive paces to live, please visit my website: http://www.thebabyboomerdiva.com