Today’s Puzzle:

As we kick of the new year, let’s talk about what statistics tell us about retirement. We found five specific stats that will surprise you and make you realize that financial planning needs to be a priority in 2021.

(Click the featured times below to jump forward in the episode)

The Solution:

We’re off and running in 2021 and looking ahead at what we hope is a great year to come.

Financial planning will be a resolution for many people, but how many will follow through? As we were discussing ideas that could keep people motivated to take action, we found some statistics that highlight how many people are falling behind.

On this episode of the podcast, we’ll pull five of the stats that are worth your time and should help you see where the shortcomings are for many Americans. Along with that, we’ll also talk about the planning strategies that can help you overcome these stats.

First up is this: 17% of workers feel confident in their savings being able to cover retirement. That’s a scary thought, right? But it’s not that surprising considering the amount of uncertainty you face in retirement. If you find yourself guessing about how much you have or what you’ll need in retirement, then you’ll likely fall to the side of the 83%.

Developing a comprehensive financial plan is important. Have one that covers taxes, healthcare, market fluctuations, and much more. Account for the uncertainty you have and address those areas. You might not be able to eliminate the concern altogether, but you’ll have much more confidence.

The next stat tells us that the average life expectancy for women is around the age of 85. That’s great news! But are you going to be prepared for a long retirement? Longevity is a major concern we have for people that haven’t laid out a retirement plan. A couple things that you should be thinking about when it comes to challenges facing women later in life.

Social Security checks are the first area. Keep in mind that you are able to keep the larger of the two monthly checks, but you’ll lose out on the total amount of income when one check is gone. Another challenge is not having anyone to take care of you once you’ve lost a spouse. When we do planning, we work on these areas specifically with clients and Nikki lays out some of those details on the show.

The third stat we found to be important for planning is that 16.5% of the country is 65 or older. That tells us a lot of people are in retirement or getting very close to that next chapter. What’s one of the biggest areas of planning that people aren’t thinking about? Taxes. It’s essential that you’re accounting for higher tax rates in years to come. These historically-low rates we have now are great, but they won’t stick around forever. Especially considering the amount of spending we’ve seen from the government to assist with pandemic relief over the past year.

The fourth stat tells us that the average retiree will spend nearly $300,000 on out-of-pocket healthcare expenses over the course of their retirement. This is nearly a 35% increase from just a few years ago. The scary thing about this statistic is that it doesn’t take long-term care into account, which can drive that number up by a significant amount. Nikki will give you a few things to think about to help you manage these expenses. The first is to really examine your Medicare benefits before signing up. The other piece of this is to make sure you have a plan of some sort that will cover your long-term care. There are a few options to cover these costs that we’ll discuss but the bottom line is you have to be prepared for these large retirement expenses.

This takes us to the last statistic that shows us how unprepared most Americans are. Despite most people realizing the importance of a written plan, only one in five people actually have taken the time to put one together. If you fall into this group and have been looking for a time to start, there’s never a better time than the present. As you’ll hear frequently, it’s never too early to start saving.

Hopefully seeing all of these stats will help motivate you to take control of your retirement this year if you haven’t already. Reach out to us to get started and let’s start putting a plan on paper.

Listen to the entire episode or click on the timestamps below to hop around to different topics.

[1:51] – Have clients been nervous about the start to 2021?

[3:10] – Breaking down five important statistics

[3:52] – Only 17% of American workers are confident they’ll have enough in retirement.

[7:30] – The average 65-year-old woman has an average life expectancy of 20.7 more years.

[9:28] – Some issues that come up for women later in life

[12:30] – 16.5% of country is over age of 65

[17:09] – The average retiree will spend $295,000 on out-of-pocket medical expenses during retirement.

[21:57] – 90% of people over 60 say a written plan is important but only 20% have one.

The Full Picture:

“There are so many things that are uncertain to us about retiring and what’s going to happen during retirement. Quite frankly, a lot of them are out of our control.”

– Nikki Earley

Free Stuff:

Click the image to get a free retirement rescue toolkit.

Additional Resources:

The host: Nikki Earley – Schedule A Time To Meet – Or Call: (513) 563 – 7526

Get Dan & Nikki’s Latest Book