AARP just released a retirement planning video Mission Retirement to show Americans the importance of saving for the future. Just about everyone’s mission is to retire some day. It isn’t impossible, but it will take work. According to AARP, there are big holes in the security net of pensions, therefore, it’s everyone’s responsibility to participate in work-based plans, like 401(k)s and cash balance plans. Workers need to take full advantage of the free money their employer offers and participate up to the available match—if not more.
Mission Retirement has five segments that emphasize everyone’s personal responsibility to save for retirement, the benefits of tax-advantaged savings opportunities, the importance of making the right retirement decisions, and options for managing your assets in retirement. In the first segment, an employee decides to enroll in his company’s 40l(k) because he understood the importance of paying himself first through an automatic contribution and realized the power of compound interest and tax deferrals.
Today the vast majority of workers are unprepared for retirement because they have not set realistic savings goals. In the second video segment, experts explain how to estimate how much we should be saving for retirement. One rule of thumb is to have a nest egg of 20 times your final salary. According to Dallas Salisbury of the Employee Benefit Research Institute, you’ll need to save 15 percent of your salary over 40 years to reach that goal.
No one can fully predict the future but we still can prepare for the unexpected - like getting downsized from a job or change in health. Gil, in the third segment, never expected he would be looking for a job at 60, but that’s what happened when his company downsized. He talks to AARP about how he wisely didn’t touch his retirement next egg, but instead went back to work.
The Crabbs, featured in segment four, had about $120,000 saved in a company plan when they retired. They learned the hard way how important it is to carefully manage their retirement money. In short order their nest egg had shrunk to $20,000 and at 68 they are looking for work. In this segment, AARP offers tips on spending money in retirement.
Good news, bad news: we are living longer. In the final segment AARP offers steps, you can take so you don’t outlive your savings. Learn how life annuities could bring you a steady stream of income, if you very carefully shop for a product with low fees and costs from a highly rated organization.
Produced for AARP