Alicia Munnell, writing in Smart Money, discusses the retirement preparedness of the Baby Boom generation.
The Highlights
…while the boomers have been accumulating wealth at much the same pace as their parents, the world has changed in four important ways:
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1) The prevalence of defined benefit pension plans has declined dramatically over the last 25 years.
2) Real interest rates have fallen significantly, so a given amount of wealth will now produce less retirement income.
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3) Life expectancy has increased, so accumulated assets must support a longer period of retirement.
4) Health care costs have risen substantially and show signs of further
increase, indicating a need for greater accumulation of retirement
assets.
So, yeah, it’s somewhat discouraging to think that you will have to save even more since the onus of retirement has now been put entirely on your shoulders.
It just points out the need to find a competent advisor early and get cracking.
It might make a good resolution for the New Year.
And this is why you really need to pay attention to your 401k . You can't afford to take big hits. Most of us have already taken 2-3 big hits over our lifetime