As the baby boomer generation enters their retirement years, many may find themselves unprepared to meet their financial needs. Fifty-four-year-old Janice Robinson plans to retire at age 62. She appears to be on the right track, having faithfully contributed 10% of her biweekly pay into her 401(k) account since starting her career with Atlanta-based fiberglass manufacturing company Owen Corning in 1984.
But not unlike many employees, Robinson has applied a ‘set it and forget it’ approach when it comes to her 401(k). “I couldn’t tell you how much is in there or what I’m invested in,â€ she admits. “I’m working hard now to pay off my mortgage so I won’t have that expense after I retire, but I don’t know if what I saved will be enough.â€ She adds, “I just know that I’m saving toward retirement and I thought that would be good enough.â€
Robinson exemplifies millions of Americans who put their 401(k) plans on autopilot. They are saving in an employer-sponsored retirement plan, but have limited knowledge about how and where their funds are invested. Add to that the concern that they’ll experience an asset shortfall when the time comes to retire.
According to the Employee Benefit Research Institute, “earlyâ€ baby boomers, meaning people 58 to 64, have a 44% chance of not having enough money to pay basic retirement costs and uninsured medical expenses. “Lateâ€ boomers, ages 48 to 57, and Generation X workers, ages 38 to 47, have about a 45% chance of running short, the study concluded.Â Taking the time to set up a good strategy and plan for your retirement can be your best ally. A lousy plan could destroy your chance of a decent and secure retirement, notes Clyde Anderson, a financial lifestyle coach.
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