Everyone has their own dream version of retirement. Unfortunately, figuring out how to achieve that dream is often a tough dose of reality. Each year the Employee Benefit Research Institute conducts a Retirement Confidence Survey; 2012 survey results indicated job uncertainty and debt weigh heavily on Americans’ confidence in achieving a comfortable retirement.
Some very telling views and attitudes of working-age Americans regarding retirement, preparations for retirement and confidence with regard to various aspects of retirement were found recently. Following are just a few:
- Americans’ confidence in their ability to retire comfortably is stagnant at historically low levels. Just 14% are very confident they will have enough money to live comfortably in retirement (statistically equivalent to the low of 13% measured in 2011 and 2009).
- 25% of workers say the age at which they expect to retire has changed in the past year. In 1991, 11% of workers said they expect to retire after age 65, and by 2012 that has grown to 37%.
- Many workers report they have virtually no savings and investments. In total, 60% of workers report that the total value of their household’s savings and investments, excluding the value of their primary home and any defined benefit plans, is less than $25,000.
- Current workers expect to be significantly less reliant on Social Security as a major source of retirement income than retirees.
Unless architects never retire, these findings seem daunting. The prospect of a dream retirement may seem less and less attainable; however, it is never too late to take steps to get “closer” to your goals and the beginning of a new year is a great time to implement some fundamental long-term strategies that you can perform in pursuit of your goals.
Diversify—Determine your risk tolerance and then invest in a variety of asset classes because it is impossible to predict which asset class will be the best or worst performers in any given year. This does not eliminate the risk of experiencing investment losses and may prevent you from capturing top-performer returns in any given year; however, this strategy can also help spread volatility risk among different classes.
Re-balance—Adjust your portfolio so that your long-term portfolio strategy stays on target and does not get skewed by out-performance or under-performance of certain asset classes. This way no single asset class will dominate your portfolio. This annual “housecleaning” of your portfolio can be critical to making the most of the benefits of asset allocation.
Dollar Cost Average—This is a simple technique where you invest a set amount into a stock or mutual fund on a regular basis. This lets you buy more shares when prices are low and fewer when they rise. The result can be a lower average cost per share. Dollar cost averaging does not assure a profit nor does it protect against loss in declining markets. To be effective, there must be a continuous investment regardless of price fluctuations. Investors should consider their financial ability to continue to make purchases through periods of low price levels.
By taking these basic simple steps, your retirement reality could look just a bit brighter.
AXA Equitable’s Members Retirement Program is endorsed by the American Institute of Architects since 1991. The full service plan saves time and expense. The Program has recently expanded the investment lineup with the addition of 13 new funds to provide participants with a broader selection of investment choices among various asset classes, along with new alternative investing opportunities.
For more information call 800-523-1125 or visit here. Information and consultations are free of charge and available to AIA members at no obligation.
This article is not intended as legal or tax advice and accordingly, any tax information provided is not intended or written to be used, and cannot be used, by any taxpayer for the purpose of avoiding penalties that may beimposed on the taxpayer. The tax information was written to support the promotion or marketing of the transaction(s) or matter(s) addressed and you should seek advice based on your particular circumstances from an independent tax advisor.
The Members Retirement Program (contract form #6059) is funded by a group variable annuity contract issued and distributed by AXA Equitable Life Insurance Company, NY, NY. AXA Equitable does not provide tax or legal advice and is not affiliated with the AIA. GE 81851 (12/12) (Exp. 12/14)