A recent report from the Deloitte Center for Financial Services (DCFS, a division of professional services company Deloitte) exposes just how bad the retirement landscape has become.
People have lost confidence not only in saving for retirement, but in having professionals handle their retirement investments. Among the findings from the report:
- One in five people have no retirement income outside of Social Security;
- 58 percent don’t have a retirement plan in place (this is out of those who took part in the survey); and
- Almost 40 percent feel that, no matter how much they save, no matter how they save it, they will be unable to generate the income they want when they retire.
Despite the dire outlook presented by the DCFS report, there are still steps that you can take to help shore up your retirement finances. The big three things you can do are:
- Social Security. You can now review your Social Security benefits online thanks to the Social Security Administration’s “mySocialSecurity” website. We’re written before on how your benefits information is the best free retirement tool you’re not using. Now is the time to take advantage of it.
- Alternate Means of Financing. Does your current employer offer a retirement package? What about former employers? Did you contribute at a previous job? If so, what did you do with your 401(k) contributions? If they haven’t been rolled over into another account, you should consider doing so to add to that future income. Also, if you don’t have enough saved up for retirement when the time comes, you can look to drawing income from your home equity through a reverse mortgage.
- Investing. Current interest rates are too low to provide a guaranteed return on your investment. There are options beyond CDs, such as bonds, or exchange-traded funds (ETFs). You should work with a trusted financial adviser to determine which investments you can increase your retirement income with.
Dan Caplinger of DailyFinance goes into more detail on how you can increase your retirement income and why.