Apr 26
Got Retirement Insurance?
Today we are discussing a disturbing statistic from a heretofore unknown Reliable Source. The Retirement Corporation of America Inc. conducted a survey about individual’s reliance and expectations of Social Security and found that millions of Americans still believe in the promise FDR saw in Social Security when he railroaded it through Congress. The survey revealed “many Americans expect to depend on Social Security as a significant source of income after they retire.”
Twenty-three percent of survey respondents “intend to rely on Social Security as their main source of income in retirement.” This unfortunate expectation may be due to lack of financial education, or it may be all that those millions of Americans expect to have in the pipeline.
Only 31 percent believe their savings, mutual funds or individual retirement accounts will be the primary source of their income. The survey also found 61 percent of non-retired Americans believe they will need to save $500,000 or more by the time they retire; while 59 percent believe that they are likely to reach their savings goals.
That seems like an awful lot of serendipity about retirement expectations. For openers, the life expectancy in this country is pushing 80, and many millions of us live beyond that. Due to the mixed blessings of medical advancement, many of those final retirement years are spent with diminished physical or mental capacity. That’s why long term care insurance is going to become a necessity over the next decade – savings goals can melt away when one retiree in the household goes into the constant care mode.
It seems that a comfortable retirement requires not only savings but a life insurance policy with annuities built into it, a long term care policy and all the bells and whistles Medicare can provide. Social Security has become an anomaly and people that expect to live on it will be living in poverty.
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April 26th, 2007 at 10:15 pm
I am astounded that nearly one-in-four respondents “intend to rely on Social Security as their main source of income in retirement.” Do people know how much that is(n’t)?
Having spent some time in various long term care facilities recently, I am convinced that a reasonably comfortable retirement will likely require all of the items mentioned above (life insurance with annuities, etc.) but ESPECIALLY LTC insurance. If only one member of a household requires this kind of extended care, which is certainly a real possibility, it will lead to a heavy draw on the financial resources of that family… beyond anything that social security will be able to provide.