Aspiring Retirees are Confused About Money

More signs of less-than-golden years ahead for many American retirees comes via this Marketwatch story that provides details of a new survey in which a surprising number of people don’t even know what their basic living expenses will be once they stop working their nine-to-five jobs.

One third of people close to retirement said they don’t know how much money they will need to cover basic expenses in retirement, according to a new study.

Soon-to-be retirees also are concerned about medical expenses and being able to cover basic needs when they retire, the survey found. Other worries include the potential hit to their savings from market fluctuations, and the risk of outliving their income, according to the survey of 1,000 U.S. residents aged 55 to 65, by Allianz Life Insurance Company of North America.

Most retirement savers concentrate on the accumulation phase, and put off planning for retirement, said Katie Libbe, vice president of consumer marketing and solutions at Allianz Life.

“It’s time to get real about retirement. That is something that you are headed toward whether you like it or not,” she said.

Since a lot of people go through their entire adult life living paycheck to paycheck, I guess it’s not too surprising that one-third don’t have a clue what their expenses will be in retirement - because they don’t have a clue now! Without a doubt, the best advice in this story is offered in the last paragraph:

But for people who don’t have an adviser, she suggested focusing on paying off all debt, or at least to have as little debt as possible. She also suggested saving more and cutting down on luxury expenses now, so you can enjoy your savings in retirement.

I can tell you from first hand experience that there are two keys to successful retirement - being healthy and getting your living expenses under control. You have almost complete control over these two factors that, in many cases, will make or break your golden years. Getting your living expenses to levels where you can get by on very litttle income (if necessary) gives you great peace-of-mind and a big part of doing that is having no mortgage or any other kind of debt that you have to service.

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