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According to the Social Security Administration, today's retirees can only count on corporate pensions and Social Security for 56% of their income at retirement. The remainder must come from other sources - personal savings and earned income. If the same holds true in the future, you may need to accumulate enough in personal savings to make up a 44% shortfall in your retirement income. Your challenge is...how to close this gap?
There are so many important considerations when planning for your retirement such as: What types of investments should you consider? What are the contribution limits and tax consequences of each? What rates should be assumed for inflation and investment earnings? What is the optimal mix of taxable and tax-deferred investments to properly fund your retirement?
- Census figures indicate that only one in every ten Americans today is financially prepared to retire when they reach age 65!
- Life expectancies continue to increase. For a 65-year-old couple, the odds that one spouse will live until age 90 are over 50%.
- Social Security benefits will replace only 16% of the income of married couples earning $50,000 - $100,000 and only 9.5% of the income of married couples earning $100,000-plus.
- Over the past 30 years inflation has averaged about 5%
Working people tend to think their retirement lifestyle will be better than their current lifestyle, but retirees report their standard of living has declined. Of retirees, 20% are "just making ends meet."
Pacific Life offers a broad range of products that can help you reach your financial goals.
Sources: U.S. Bureau of the Census; National Association of Variable Annuities; CSIS National Commission on Retirement Policy, 1997; Office of Research and Economic Analysis, Pension and Welfare Administration; Employee Benefit Research Institute; Merrill Lynch Strategic Planning
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