Are You Hitting Roadblocks Along the Way to Retirement?

More and more of us in the GLBT community are facing the reality that the financial demands of everyday living are getting in the way of our ability to save for tomorrow. We are not paying nearly enough attention to our long-term needs, especially the need to save and plan for retirement. Some of us plan to work longer to be better positioned for retirement, but we may not be considering the possibility that we may not have the luxury of retiring on our own terms.

Changes over the last decade have also had a major impact on retirement prospects. The stock market can go down, and stay down for a long stretch. Financial well-being is affected not only by domestic economic policies, but also by events in foreign lands and the security of our homeland. While income may have grown, health care costs have been growing at an even faster rate. These challenges can be daunting and leave many looking for a clearer path toward securing a comfortable retirement.

Prudential Financial’s study, “Roadblocks to Retirement,” sheds light on Americans’ views about these challenges and how prepared they are to face them. According to the study, Americans’ tendency to borrow and consume “today” is a national trend affecting everyone.

Primary challenges that surfaced in the 2005 study include:

When Retirement Arrives Uninvited

Issues such as downsizing, injury, health limitations or family emergencies can lead to a sudden and unexpected retirement. Four in 10 respondents indicate they were forced to retire, and nearly half of involuntary retirees were under the age of 60. Almost two-thirds of the people who retired unexpectedly said they were not financially prepared.

The “Dream” Retirement Could Be Just That For Many

Among those who were forced into retirement, six in 10 said they are simply trying to make ends meet. Even among those who retired on their own terms, two-thirds indicated they are just living “comfortably.” Fewer than half of all retirees said they were able to travel or vacation as they may have hoped.

Many Expect To Just Work It Out

With retirement lasting 20 years or more for many Americans, their needs will change dramatically over this time. Retirement finances will need to last through the shifting demands. During the first ten years of retirement, seven in 10 Americans currently expect to continue working to supplement income and continue to build their nest egg. At the same time, 64 percent recognize they may be simultaneously coping with deteriorating health. In the second 10 years of retirement, 80 percent of respondents indicated health care was a top concern, with many retirees expecting to require nursing home care and/or run out of money.

Despite these challenges and a reluctance to save, about 80 percent of Americans who regularly save for retirement, hardly notice the “lost” spending opportunity. Ultimately they feel happy about their savings toward tomorrow’s security.

Americans have clear retirement goals. However, many are not sufficiently informed to effectively plan for the transition to retirement. Help make sure you and those you care about are adequately prepared and protected into your retirement years. For additional tips and resources to help you take control of your retirement strategy, visit www.Prudential.com.

Kurt Schummer is a Manager, Financial Services with The Prudential Insurance Company of America's Packerland Agency located in Wauwatosa, WI. Kurt Schummer can be reached at kurt.Schummer@prudential.com or 414-456-1770, ext. 7240.