Here's a disturbing bit of information: As of last year, about 9 million senior citizens were still working -- more than twice as many as in the year 2000, per The Washington Post. As you might imagine, most of those folks are working because they have to -- because they can't afford to completely retire.

It's smart to read up on retirement and to have a plan in place, lest you end up one of the many people working into their late 60s and beyond. Here are 20 things you'd do well to know. Many of them will likely surprise you -- and knowing some of them could enrich you.

surprised man with mouth open and palms on cheeks

Image source: Getty Images.

Most Americans are underprepared for retirement

You probably won't be shocked to hear that most Americans have not saved enough for retirement. But the extent of the problem may stun you:

  • About 24% of workers -- and, alarmingly, a hefty 21% of retirees -- said they had less than $1,000 saved for retirement, according to the Employee Benefit Research Institute's 2017 Retirement Confidence Survey. A whopping 55% of workers and 38% of retirees had less than $50,000:

Amount Saved for Retirement

Percentage of Workers

Percent of Retirees

Less than $1,000

24%

21%

$1,000 to $9,999

14%

8%

$10,000 to $24,999

9%

6%

$25,000 to $49,999

8%

3%

$50,000 to $99,999

10%

7%

$100,000 to $249,999

15%

16%

$250,000 or more

20%

38%

Source: 2017 Retirement Confidence Survey. 

  • Add together all pre-retirees' shortfalls, and the numbers get even more jaw-dropping: The National Institute on Retirement Security has estimated that the nation's retirement savings gap totals between $6.8 trillion and $14 trillion.

You need a plan

The best way to avoid being part of an unfortunate statistic is to prepare -- with a retirement plan that we stay on top of and execute well.

  • Fully 76% of Baby Boomers surveyed in 2016 were not confident that they had enough saved for retirement, according to the Insured Retirement Institute. Among those folks, 68% wished they'd saved more, and 67% wished they had started saving earlier.
  • The median retirement age in America is 63. How many years from retirement are you, and have you saved enough money for retirement?
  • About 30% of workers don't know what they will do with the funds in their workplace retirement accounts (such as 401(k)s) come retirement, per the 2018 Retirement Confidence Survey. They might cash it out or roll it over into an IRA or buy an annuity -- but they don't have a plan.
  • Are you saddled with student loan debt? Do you have a plan for getting out from under it? The Consumer Finance Protection Bureau found that the number of student loan borrowers who were 60 or older increased by at least 20% in every state between 2012 and 2017, and by more than 45% in more than half of the states.
  • About a quarter (24%) of workers have received advice from an investment advisor or financial advisor, per the 2017 Retirement Confidence Survey. There's no shame in consulting a pro, and it can help your situation, too. Yes, a good pro will cost some money, but he or she will likely help you save or earn much more than their fee. Ask around for recommended advisors and consider favoring fee-only planners instead of those who may have conflicts of interest such as commissions earned by selling you various products. You'll find some local fee-only pros at Napfa.org.

Plan carefully and conservatively

As you plan, be conservative, as there will be unexpected expenses along the way, as well as expenses that are far more costly than expected.

  • Fully 44% of retirees found that healthcare expenses in retirement were somewhat higher (27%) or much higher (17%) than they expected, per the 2018 Retirement Confidence Survey.
  • A 65-year-old couple retiring today can expect to spend an average of $280,000 out of pocket on healthcare expenses over the course of their retirement, per Fidelity Investments. 
  • Speaking of healthcare, it's important to understand that if you're late enrolling for Medicare, it can cost you. Your part B premiums (which cover medical services, but not hospital services) can rise by 10% for each year that you were eligible for Medicare but didn't enroll. The no-penalty enrollment period for most people is any time within the three months leading up to your 65th birthday, during the month of your birthday, or within the three months that follow.
  • You may live an extra-long life, meaning that your nest egg will have to support you for a long time. According to the Social Security Administration, "About one out of every four 65-year-olds today will live past age 90, and one out of 10 will live past age 95." Retire at 65 and live to 95, and you're looking at a retirement that's 30 years long! If you live to 100 and retire at age 62, you're looking at 38 years of retirement.
  • You might end up retiring earlier than you planned to. According to the 2016 Retirement Confidence Survey, 46% of retirees left the workforce earlier than planned, with 55% citing health problems or a disability as the reason, and 24% citing changes at work such as a downsizing or workplace closure.
  • Divorce can screw up your retirement, too: 24% of divorced Baby Boomers stated that they are, or expect to be, worse off in retirement than if they had not divorced, per a 2016 survey by the Insured Retirement Institute.
Two red dice on a newspaper next to a torn paper on which is printed the question have you saved enough

Image source: Getty Images.

You can accumulate more money than you think

Fortunately, all is not lost. Even if retirement is only a few years away, you can make your nest egg significantly bigger before retiring if you save aggressively and invest effectively.

  • Check out the table below, which shows what you might accumulate over various periods if you can save large sums and earn an average annual return of 8%:

Growing at 8% for

$10,000 invested annually

$15,000 invested annually

$20,000 invested annually

5 years

$63,359

$95,039

$126,719

10 years

$156,455

$234,682

$312,910

15 years

$293,243

$439,864

$586,486

20 years

$494,229

$741,344

$988,458

25 years

$789,544

$1.2 million

$1.6 million

30 years

$1.2 million

$1.8 million

$2.4 million

Source: Calculations by author.

  • If you use the flawed but still helpful 4% rule, withdrawing 4% of your nest egg in your first year of retirement and then adjusting for inflation in subsequent years, here's how much income nest eggs of various sizes would generate in year one:

Nest Egg

4% First-Year Withdrawal

$250,000

$10,000

$300,000

$12,000

$400,000

$16,000

$500,000

$20,000

$600,000

$24,000

$750,000

$30,000

$1 million

$40,000

Source: Author calculations.

Get realistic about Social Security

Social Security is a critical source of income in retirement, but many people are under-informed about it.

  • Only 36% of workers have said that Social Security will be a major source of their retirement income, but 67% of retirees say it's a major source, per the 2018 Retirement Confidence Survey.
  • The Social Security Administration offers its own take on this, noting that most elderly beneficiaries get 50% or more of their income from Social Security, while 21% of married ones and 43% of unmarried ones get fully 90% or more of their income from it. If you're now thinking that Social Security pays out a lot to each retiree, keep reading.
  • The average Social Security retirement benefit was recently $1,413 per month, or about $17,000 per year. You might well collect more, though, and there are ways to increase your Social Security benefits.
  • The maximum benefit for those retiring at their full retirement age was recently $2,788 per month -- or about $33,000 for the whole year. For those who wait until age 70 to start collecting benefits, the maximum is $3,698, or about $44,400. Remember, though, that these maximums go to those who earned a lot more than average in their working lives.
  • The age at which you file for retirement benefits will determine the size of your monthly checks. You can start as early as age 62, but your benefits will be reduced by up to 30%. Wait until age 70, and your checks can be up to 32% bigger. Note, however, that you'll receive far fewer checks if you delay a long time, so for beneficiaries with average life spans, it's a wash.

The more you know about retirement and what to expect from it, the better you can plan for it. A well executed retirement plan can make a huge difference in your financial future, leaving you secure and comfortable for the rest of your days.

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