How confident are you about your retirement savings? That might seem like a difficult question to answer. Maybe a better question is – do you own your home? If your answer is no, you’re not alone. Retirement-age homeowners are more likely than ever to carry mortgage debt. According to a USA Today analysis of census data, more than 28 percent of homeowners age 65 or older owe on their homes. That might not seem like an outrageous percentage, but when compared to about 21 percent in 1990 and about 19 percent in 1980, the trend is obvious.
What makes these numbers so surprising is that those, age 65 and older, are the ones most likely to have homes paid off. The rising trend reflects the difficulty of the longest-held financial goal – retirement. According to the annual Retirement Confidence Survey of 2004, 24 percent of respondents described themselves as very confident of being able to live comfortably throughout their retirement years, 13 percent saying they’re not confident at all.
Today’s retirees have delayed saving. Their generation sent more kids to college than ever before and education costs can have a strain on income. Another factor is attitude and how much retirees have changed. As the Great Depression fades, so do the anti-debt views of those who survived it. As a nation, we’re all less cautious of how much debt we build.
Lack of planning is what many retirees blame when it comes close to retirement. I can’t tell you how many people have said, “I wish I would have thought of retirement sooner.” When I say don’t worry, it’s not too late, most look at me with confusion, others laugh, some say prove it. The following are three basic steps to determining your level of retirement confidence:
Step 1: Review Your Financial Situation: A top-to-bottom review of your financial situation is a good place to start. Tracking all of your income, expenditures and retirement plan performance can help you determine whether you’re managing your retirement assets wisely.
Step 2: Make Necessary Adjustments: How long has it been since you’ve moved your investments around? The economic climate constantly changes; therefore, you sometimes have to change too.
Step 3: Explore Alternatives: The financial landscape is like a maze, there are options everywhere you turn. The best advice is to get in there and give yourself a variety based on your personal situation. If you have a financial professional you or someone close to you trusts, it’s worth a conversation. Remember, a consultation is not a contract and don’t be afraid of change – it’s a good thing.
Statistics can paint a disturbing portrait of the state of retirement today. Luckily, there are many ways to boost your retirement portfolio. If you’re unsure of your confidence level, be sure to talk with a trusted financial professional.
Eric Heckman is president of Heckman Financial & Ins. Contact him at www.WealthCreator.com or 297-9800.
