Some people toss around the word “retirement” as though it was some type of given. This could stem from the misconception that everyone will be able to retire once they start receiving Social Security and Medicare coverage. If you’re one of these individuals you may want to do some research.
The Social Security Administration states that the average monthly check in 2010 was $1072. As we all know, we’re in the throes of a budgetary crisis. Social Security outlays account for 20% of the national budget, and Medicare and Medicaid expenditures comprise 23% of all spending. Cuts may very well be in the offing.
So if you are thinking that these programs will be sufficient to enable a comfortable retirement you may want to think again. A recent poll conducted by LifeGoesStrong.com in partnership with the Associated Press found that about one quarter of baby boomers polled had no retirement savings at all, and a similar number stated that they would never be able to retire. A large percentage of people were apparently lulled to sleep under the illusion that federal retirement benefits would suffice, and they are now paying the price.
Clearly, if you want to make the most of your golden years you’re going to have to plan ahead. Doing everything possible to accumulate a nest egg is key, but debt reduction is equally as important. The debt that you carry comes along with interest payments, so putting money aside that is earning less than the interest you’re paying on your debt may not be a good idea. The larger net gain may lie in using those funds to pay off debt as quickly as possible.
Striking the correct balance can be a bit challenging. The best way to develop a comprehensive and holistic retirement plan is to sit down with a good retirement planning attorney, explain your goals, and work with your lawyer to carve out a path that leads to a comfortable retirement.