Most Americans would agree that they want financial security during their retirement years.  If this is true, then why aren’t more Americans taking an active role in planning for their golden years? Whether it’s maxing out the company 401(k) plan or investing in long-term care and life insurance policies, here are 10 reasons why the best time to start retirement planning is now.  The younger you start, the better chance you have of achieving the retirement lifestyle you’re dreaming of.

1. Saving Money Is Now Your Responsibility.
   As employee pensions, social security, and other benefits wane while the costs of health care and basic goods and services continue to rise, employees will increasingly bear the majority of responsibility for their retirement savings.
   
2. Social Security Isn’t What It Used To Be.
   Monthly benefit checks from Social Security continue to provide less and less of one’s income, and as of today, account for only 40% of an average worker’s pre-retirement income. In 2004, the average benefit check was only $922 a month (Nation Center for Policy Analysis, 2005).
   
3. Most Americans Haven’t Estimated What Their Retirement Needs Will Be.
   The majority of Americans have never estimated their retirement needs and/or underestimate the amount they will need to save to live comfortably in retirement.
   
4. You Will Need More Than You Think.
   Social Security benefits are adjusted for inflation, but private pensions are usually fixed. Putting away a little extra here and there will not suffice. For example, if you are a 45 year-old person earning $50,000 a year and have not begun planning for retirement, you will have to save $336,199 or $12,103 a year if you plan on retiring by age 65.
   
5. Personal Savings Is Down.
   As the American rate of spending increases, the rate of personal savings keeps dropping. In 1980, savings as a percentage of disposable income was 10%. In 1990, it dropped to 7%. In 2000, the number slid down to 2.3%. In 2004, it declined to 1.8%.
   
6. Working After Retirement.
   Working after retirement is a good way to supplement your income, but finding a job or being able to work after retirement is not a guarantee. Unexpected obstacles like health problems or a disability may keep you from being able to hold a job
   
7. The Rising Cost Of Health Care.
   The rising cost of health care has become a huge financial burden for seniors today and it will affect you when it is time for your retirement. Will you be able to afford health care when you need it most?
   
8. Long-Term Care.
   Don’t forget to factor in long-term care when estimating your retirement savings needs. We may not be able to predict whether a nursing home or in-home care will be necessary for us during our retirement years, but planning for this very expensive possibility is a must.
   
9. Retirees Continue To Spend.
   When you retire, the money you spent on mortgage payments, business suits and other work-life necessities is now spent on vacations, recreation, and helping with the needs of your family. Will you have enough saved to live this way?
   
10. Time is Money.
    Your retirement planning can’t wait any longer. If you start contributing to an income tax-deferred retirement account today, you’ll start significantly improving your financial situation after retirement.

For more information on how NIA can help you plan for a secure retirement,  contact Jayne Schiff, Director, NIA Executive Benefits, at 201.336.1264 or jschiff@niagroup.com.