Saving for retirement is not a choice. It’s a necessity. Social Security benefits are a vital economic linchpin for retirees, but they aren’t likely to provide for all your financial needs. They were designed to fulfill only about 40% of the income Americans had before retirement.
But Americans need an estimated 80% of the income they were making before retirement to make ends meet. Contrary to popular opinion, income needs don’t fall that much when you retire. You’ve still got to eat and have a place to live. You’re highly likely to still need a car. You still need healthcare -- and healthcare expenses often rise for older people. You’ll still like to have fun. All of those needs require money. You need retirement savings to fund a comfortable and happy life in retirement.
Plus, about 66% of us are afraid Social Security won’t be there when it comes time to retire. It’s probably not necessary to worry that much -- politicians can find a way to fund Social Security given the will. But frankly, it’s also impossible to predict what will happen on the Social Security front going forward. Retirement savings are the answer to anxiety on that score.
People are living longer than ever before. That’s a tremendous benefit. But to live happily, you need to build a retirement nest egg. To build and maintain a nest egg successfully, you’ve got to do a periodic sanity check on your plans and your savings. Ask yourself these questions.
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