Many Baby Boomers Not Prepared Financially For Retirement - WBOC-TV 16, Delmarvas News Leader, FOX 21 -

Many Baby Boomers Not Prepared Financially For Retirement

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SALISBURY, Md.- Most everyone has dreams of what they want to do in retirement, but fulfilling those dreams is not free. Study after study shows an alarming number of baby boomers are ill-prepared, financially, for retirement. But experts say it’s never too late.

Jackie Peruchi says she is fortunate. She learned valuable lessons about managing her money from others' mistakes. Peruchi and her husband have been saving for retirement for many years, and that diligence has paid off.

"It's piece of mind. it's knowing we'll be able to retire comfortably, not extravagantly, but comfortably," said Jackie Peruchi, Salisbury. And she has always had an eye on the future.

"You plan to fail if you don't plan," she said.

But not everyone is so fortunate. In fact, the numbers are alarming. Most companies stopped doling out pensions years ago, leaving people to save for their own retirement. One study shows, not including social security, 45-percent of baby-boomers have no savings, and of those who do save, about half have as much as $100,000. People cite a number of reasons for not saving: credit card debt, low wages, student loans, saving for children's college education. And a majority expect Social Security will be their primary source of income once they stop working, whenever that is, as more and more people are working until they are 70.

"Social Security is hard to live on. It's not enough to pay all the bills," said Dennis Hopson, Financial Advisor, Edward Jones.
Let's face it, getting old is expensive. A typical 65-year old couple can expect to spend about $250,000 in health care costs, and that number is rising every year. 

So, what can one do?

Experts say it really is never too late to make your money work for you, but you have to do it wisely, like putting it where it will grow, such as a company 401K, or Roth IRA, both of which offer tax advantages. And don't just stash it in a savings account.

"Right now in a money-market you are getting point-01-percent, or less, whereas in the stock market you are getting 7-10 percent.  Yeah, there are ups and downs, but if you look back in history, you are going to get 7-10 percent," said Hopson. And that growth builds on itself every year.

"If you have 10, 15, 20 years, you can really make that money grow, if it's done right, it can double every seven years," he said.
Here's an example.

Let's say you are 55, and have $100,000 in savings. If are able to invest $10,000 a year for ten years, you will have around $345,000 when you reach 65.
But it is critical to invest consistently. There are any number of financial calculators on the internet to help you figure these numbers according to your personal finances. 

Part of that consistent investing could include target funds, or age-based funds, which are usually mutual funds whose allocation mix becomes more conservative as you near your projected retirement date. And, there are catch-up provisions for older investors. 

The government allows people over 50 to contribute more to tax-advantaged accounts than younger investors.

As Jackie Peruchi gets closer to retirement, she is glad she has stuck to simple piece of advice.

"It doesn't matter how much you have, investing a little is better than investing nothing. Think of your future. It's your future, and your children's future," she said.

Here are links to two stories online that can provide additional information regarding retirement savings:

http://www.topretirements.com/blog/retirement-planning-2/checklthe-retiring-baby-boomer-10-more-to-think-about.html/

https://www.gobankingrates.com/retirement/27-steps-maximize-401k-2016/

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